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Additionally, the lack of harmonization in national regulations complicates cross-border trade further. A 2020 IMF study revealed that internal barriers in Europe are equivalent to tariffs of 45% for manufacturing and an astonishing 110% for services. This starkly contrasts with the fluidity of trade seen between American states, which may partly explain why the EU's intra-national trade pales in comparison.
Implications of Trade Barriers
The ripple effects of these trade barriers lead European countries to seek opportunities outside their borders, increasingly engaging in international trade. This shift is evidenced by an increase in trade as a percentage of GDP, which has surged in the Euro Zone from 31% in 1999 to 55% today.