Trade Policy

Abstract

This chapter analyses the contribution of international economics to the understanding of European integration. It shows that the economists’ approach to European integration was for a long time driven by viewing the original European Economic Community (EEC) as nothing more than a trade arrangement, with the result that they had modest expectations of the impact, until the era of the Internal Market, when new policy questions inspired new tools and insights. We pay attention to the analysis of external trade policy but we begin by emphasizing that international economics provided the core tools with which economists analysed the process of integration within the EEC and later the European Union (EU). We go on to discuss first the EU’s multilateral and then its bilateral/regional approaches as seen by economists. The theme running through this chapter is that economists have consistently focussed on the question of whether the European integration process is a move towards or away from free trade.