Implications of Western European integration for trade of developing countries

The integration of western Europe is likely to have two different types of effect on trade with the rest of the world. On the one hand, in so far as the integration process leads to an acceleration in the growth of incomes in western Europe, the total demand for imports is likely to rise accordingly. On the other hand, in so far as the new arrangements lead to a diversion in western Europe’s demand away from goods which had previously been imported from other areas, towards its own produce, trade with the rest of the world will be affected adversely.

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