Trade Diversion in the 'Left-Outs' in the Eastward Enlargement of the European Union: The Case of Slovakia

Abstract: I analyze three scenarios including no Eastward enlargement of the EU and the accession of Central European countries including and excluding Slovakia. The formulation of these scenarios is derived from the evidence on former relations between EU and EFTA as estimated by gravity models for total trade and major SITC one-digit commodity groups. A significant part of Slovakia's extraordinary trade relations with the Czech Republic will diminish if the country does not participate in thefirst wave of Eastward enlargement of the EU. These export losses can be compensated by export gains to Hungary and Poland.