EU enlargement and the evolution of European production networks

We analyse the regionalisation of the European Union's production networks and the impact of enlargement by looking at trends in trade in intermediate and final products in different types of technology between 1995 and 2007. We find that enlargement has coincided with quite major changes in the structure of trade within and beyond the EU. Overall we find that the new member states of the EU12 have become a more important source of goods both for the sub-region itself and for the EU15.We look at trends in different types of products and technologies. We find that there has been greater regional consolidation of production networks in lower tech goods, while in high tech goods global sources of inputs – especially ASEAN + 3 – are becoming more important. Overall the EU12 is becoming a more important source of both intermediate and final products, especially within its own sub-region. This evolution makes the companies in the sub-region very dependent on the EU home market.

► We look at trade patterns by type of good and technology in the enlarged EU.
► We find the trade of new member states to be increasingly integrated within the EU.
► There is a visible shift in intermediates trade from the EU15 to the EU12.
► Trade in the EU in most types of high tech goods tends to be more globally oriented.