European Integration and Trade Flows

We study a model of intra-European trade flows and trade between Europe and the rest of the world for 29 manufacturing sectors for 1975-85. We investigate the claim that European integration has slowed down in recent years and find that it has proceeded alongside integration with the rest of the world. Only in the food industry has European integration occurred at the expense of world integration. We also use an econometric model to investigate the factors underlying European trade flows and how these factors have changed over time.