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The European Union provides coordination and \u85nancing of trans-European trans-port infrastructures, i.e. roads and railways, which link the EUMember States and reduce the cost of transport and mobility. This raises the question if EU involve-ment in this area is justi\u85ed by ine ¢ ciencies of national infrastructure policies. Moreover, an often expressed concern is that policies enhancing mobility may boost tax competition. We deal with these questions using a model where union countries and non-union countries compete for the location of pro\u85table \u85rms. We show that a coordination of investment in transport cost reducing infrastruc-tures within union countries enhances welfare and mitigates tax competition. In contrast, with regard to union-periphery infrastructure, the union has an interest in a coordinated reduction of investment expenditures. Here, the e¤ects on tax competition are ambiguous. Our results provide a rationale for EU-level regional policy that supports the development of intra-union infrastructure