EU integration and its implications for Asian economies: What we do and do not know

We argue that the potential discrimination effect of EU integration against trade with third countries may increase with new member states entering European Monetary Union (EMU). At the same time, so-called overlap or similarity indices for trade patterns show an increasing similarity between EU, US, and Japanese exports to Asia on the one hand and Asian and European exports to industrialized countries on the other hand. These observations can explain the focus of European contingent protection on Asian competitors and potential interest of the EU in locking into free trade agreements (FTA) among Asian countries, including ASEAN.