No. 188 - Industrial Countries' Protectionism with Respect to Eastern Europe

The Impact of the Association Agreement Concluded with the EC on the Exports of Poland, Czechoslovakia and Hungary

by Cristina Mastropasqua and Valeria Rolli
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The paper assesses industrial countries' protectionism with respect to Eastern Europe until 1990 and simulates the impact of EC tariff liberalization (following the implementation of the Association Agreement between the EC and Poland, Czechoslovakia and Hungary) on imports from the three East European countries. During the last decade, OECD tariffs on imports from Central and East European countries (CEECs) were higher than those applied to developing countries. Since 1990 industrial countries' trade policies with respect to Eastern Europe have been relaxed. In December 1991 an Association Agreement between the EC and Poland, Czechoslovakia and Hungary was concluded, laying down the creation of a free trade area for non-agricultural goods. A simulation of the effects of the Association Agreement on Polish, Czechoslovak and Hungarian exports was performed using a partial equilibrium model of international trade flows. The increase in the three countries' total export revenues due to tariff reductions is between 8 and 12 per cent, depending whether CEECs export supply elasticities are respectively finite or infinite. In the finite case, the present value of additional annual export flows ranges between 10 and 17 per cent of the three countries' external debt in 1991.

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  1. 31 January 1993
    No. 188 - Industrial Countries’ Protectionism with Respect to Eastern Europe
    PDF 3 MB

    The Impact of the Association Agreement Concluded with the EC on the Exports of Poland, Czechoslovakia and Hungary