Developments in Trading Patterns in the Common Market and EFTA

Abstract

Abstract The European Economic Community (EEC) was created in January, 1958. The European Free Trade Association (EFTA) was organized two years later with the intent to “catch up” within six months. These markets provide instances of two major types of discrimination, namely a customs union and a free-trade area. They have now functioned long enough to permit useful examination of the trading patterns that have developed in the wake of discrimination. The purpose of this article is to examine the trading relations of these two markets between 1960 and 1967 using a particular measure of trading intensity. The concern is changes in trading patterns and their causes rather than the welfare implications of such changes.