Assessing the trade impact of the European neighbourhood policy on the EU-MED free trade area

The European Neighbourhood Policy (ENP) set an additional objective for the Southern Mediterranean Countries (SMCs): the prospect of ‘a stake in the internal market’. The launch of this new policy has been the occasion for a revival of empirical studies aimed at assessing the impact of the EU-MED partnership on bilateral trade. The novelty of this work is twofold: (i) to present nonparametric matching estimators besides gravity estimates; (ii) to assume as a counterfactual of the treatment the ex-post long-run average treatment effects of the Europe Agreements. By controlling for likely selection bias and country and time heterogeneity, using both qualitative and quantitative measures of the policy variable, we assess ex-post the trade-enhancing impact of the EU preferential agreements towards SMCs and ex ante the actual efficacy of the ENP.