Revisiting the cost of non-Europe

a column by Thierry Mayer, Vincent Vicard and Soledad Zignago for VOX: CEPR’s Policy Portal

Sixty years after the Treaty of Rome came into force, doubts about the benefits of trade openness are increasing among the general public and policymakers, with Brexit and calls from many governments for a reversal of key integration agreements painting a bleak picture of what may come next.

This column revisits the gains EU members have reaped from trade integration since 1957 and what would be the costs of going backwards. The results suggest that the Single Market has increased trade between EU members by 109% on average for goods, with associated welfare gains reaching 4.4% for the average European country.

Continue reading

---

Brexit, the four freedoms, and the indivisibility dogma

a column by Wilhelm Kohler and Gernot Müller for VOX: CEPR’s Policy Portal

The EU’s position in the Brexit negotiations is based on the premise that the four freedoms of the single market – goods, capital, services, and labour – are indivisible. This column argues that this indivisibility claim has no economic foundations, and that negotiating on this premise risks unnecessary harm. Reintroducing trade barriers will inflict damage on both sides of the Channel. The possibility that abandoning indivisibility may cause harm through cherry picking, or through potential further exits, doesn’t justify a hard Brexit scenario.

Continue reading

---