Exports in a Tariff-Free Environment: What Structural Reforms Matter? Evidence from the European Union Single Market

By Jesmin Rahman, Ara Stepanyan, Jessie Yang, Li Zeng

August 3, 2015

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Jesmin Rahman, Ara Stepanyan, Jessie Yang, and Li Zeng. Exports in a Tariff-Free Environment: What Structural Reforms Matter? Evidence from the European Union Single Market, (USA: International Monetary Fund, 2015) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

How do countries enhance their exports of goods in a largely tariff-free environment? Our investigation of export performance of new member states in the European Union single market, which provides a natural control for barrier-free environment, points to the importance of structural reforms, particularly in the areas of higher education, skills upgrade, wage structure’s ability to provide incentives to work and foreign investment environment. In addition, establishing links with supply chains, which in addition to the above-mentioned reforms also depend on better institutions and infrastructure, are important. The analysis in the paper shows that new member states are at varying levels of quality and integration, which highlights the need for country-specific policy priorities. Services trade, which is subject to significant non-tariff barriers in the EU market even after the implementation of the Services Directive, shows considerable room for growth given the comparative advantage of some of the new member states.

Subject: Balance of payments, Export performance, Exports, Foreign direct investment, Human capital, International trade, Labor, Service exports

Keywords: Comparative advantage, Country, EU single market, European Union, Export, Export integration, Export performance, Export products, Export quality, Exports, Exports to the EU, Foreign direct investment, Global, Human capital, New member states, Quality improvement, Service exports, Single market, Structural reform, Supply chain, WP

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/187
Stock No:

WPIEA2015187
ISBN:

9781513552170
ISSN:

1018-5941

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