The Positive Effects Of The Schengen Agreement On European Trade

Escaith, H and M Timmer (2012) “Global value chains, trade, jobs, and environment: The new WIOD database”, VoxEU.org, 13 May 2012. Schengen has made it easier to travel within Europe. However, Schengen has always been motivated by the promotion of cross-border trade in goods and services (Ademmer et al. 2015). The idea is that the elimination of waiting times at borders reduces trade costs, thus promoting cross-border trade and the mobility of service providers and consumers. This should lead to greater prosperity for EU citizens. The reintroduction of controls jeopardizes these benefits. Arkolakis, C, A Costinot and A Rodríguez-Clare (2012) “New trade models, same old gains?”, American Economic Review, 102 (1): 94-130. The trade implications of the Schengen Agreement have an obvious spatial dimension. A land traffic flow between two countries in Europe can have only one internal border (e.g.

France.B to Germany) or up to eight of them (e.g. B Portugal to Finland). Therefore, Schengen membership treats couples from countries in a heterogeneous way. This characteristic is ignored in the existing small literature (for example. B Davis and Gift 2013). In addition, Schengen marginals, such as Great Britain or Turkey, can also benefit from the agreement, as their trade flows pass through the Schengen area. To deal with this, we combine GIS data with information from Google Maps to count the number of Schengen borders crossed by trucks (and ferries) along the shortest road distance between pairs of trading countries. This counting variable is our measure of interest. Keywords: Schengen, refugees, trade, cross-border trade, EU, EZ, Europe, border controls, Trade Agreement Figure 2. Average therapeutic effects of European integration policy, expressed in terms of reduction of ad valorem duty equivalents (%) Source: Own calculations based on data from the GTAP 9 database. RoW is “the rest of the world” and displays intercontinental exchanges (for example.

B with the United States or China). Figure 5. Welfare effects for some countries (% of real GDP per capita) The Schengen Agreements, which were first launched in 1995 in six countries (BENELUX, France, Germany, Italy), have increased over time and now represent around 400 million citizens in 26 countries (see Figure 1). Not all EU Member States are part of Schengen, but some non-EU countries are. All EZ countries are members of Schengen, but they ratified the agreement on different dates. From an economic point of view, the variable geometry of Europe, often deplored, is beneficial. It allows us to use the panel`s economy to unravel the different effects of EU, eurozone and Schengen membership and other trade agreements (e.g.B EFTA, EEA or pre-accession agreements). Figure 4.

The average trade savings achieved by Schengen for intracontinental trade of different countries, 2011 If a trade route has several internal borders, the cost savings add up – a truck connecting Italy to Germany crosses two internal borders, making Schengen represent a trade saving of around 1.4%; A truck between Portugal and Poland crosses four internal borders, saving Schengen around 2.8%. However, more than 80% of intracontinental trade in Europe crosses only one or two internal borders (see Figure 3). . . .