Trade Integration in the European Economic Community Through the Establishment of a Security Community

The study examines trade integration between states through the establishment of a security community. The understanding of a security community comes from Karl Deutsch, who coined the term in 1957. Karl Deutsch defined it as a group of integrated states that have assurance that the members will not fight each other and adhere to peaceful interaction. The research looks at the European Economic Community (EEC), which set up its security community in 1970 with the formation of the European Political Cooperation. We look at the effect of this security community on imports within the community and propose institutions that promote security and sustainable peace to be an important factor in promoting trade. The analysis is modelled using a gravity model of international trade for the time period of 1960–1993 for 12 EEC members. The study finds an increase of approximately 27.0% in bilateral imports between the members after the creation of the security community, under the European Political Cooperation in 1970. This increase is attributed to the creation of institutions and endorsement of common foreign policy interests. The study is significant at a time when global conflict levels are at their highest since World War II, highlighting the importance of security-oriented institutions to foster both peace and economic integration. JEL Codes: C23, F15, F55