Europe Fettered: The impact of crisis-era trade distortions on exports from the European Union

Having grown in real terms by 60% between 2000 to 2008, extra-EU exports have since stagnated. Stripping out other determinants of EU export growth, the focus here is on the impact of trade distortions imposed by foreign governments since the global economic crisis began. Our econometric analysis implies that crisis-era trade distortions held back EU Member State export growth to destinations outside of the EU by between 10-20 percentage points between 2008 and 2014. We estimate that the EU export growth deficit compared to China (amounting to on average 35 percentage points from 2008 to 2014) would have been halved in the absence of foreign trade distortions.