koen de backer, k., menon, c. desnoyers - james, i. and moussiegt, l. ( 2016 ), “ reshoring : myth or reality? ”, oecd science, technology and industry policy papers, no 27, oecd publishing ; and baldwin, r. ( 2016 ), the great convergence : information technology and the new globalization, harvard university press. 8 / 10 bis central bankers'speeches [ 6 ] oecd ( 2018 ), oecd economic outlook, volume 2018, issue 1, chapter 2. [ 7 ] in ‘ t veld, j. ( 2019 ), “ quantifying the economic effects of the single market in a structural macromodel ”, european economy discussion paper, no 094, european commission, february. [ 8 ] this scenario assumes a counterfactual in which trade reverts to wto - rules, and applies most favoured nation ( mfn ) rates as tariffs on goods. for non - tariff barriers, it relies on estimates calculated for trade between the eu and the us. see in ‘ t veld, j. ( 2019 ), op. cit. [ 9 ] as measured by ppp - adjusted gdp. [ 10 ] excluding intra - eu trade. [ 11 ] for further details, see ecb ( 2015 ), the international role of the euro, frankfurt am main, july. [ 12 ] see gopinath, g., itskhoki, o. and rigobon, r. ( 2010 ), “ currency choice and exchange rate pass - through ”, american economic review, vol. 100, no 1, pp. 304 – 336. [ 13 ] see falagiarda, m., mcquade, p. and tirpak, m. ( 2015 ), “ spillovers from the ecb ’ s nonstandard monetary policies on non - euro area eu countries : evidence from an event - study analysis ”, ecb working paper series, no 1869 ; potjagailo, g. ( 2017 ), “ spillover effects from euro area monetary policy across europe : a factor - augmented var approach ”, journal of international money and finance, 72 ( april ) : 127 – 147 ; baurle, g., gubler, m. and kanzig, d. ( 2017 ), “ international inflation spillovers – the role of different shocks

multinational firms can influence national regulations through the threat of relocation, as well as arbitrage tax systems by shifting income flows and intangible assets across jurisdictions. there can also be incentives for countries to use labour standards as a tool of international competition – the so - called “ race to the bottom ”. this makes it more difficult for countries to enforce their core values and protect their people. it also leads to corporate tax bases being eroded, which makes it harder to finance welfare 3 / 10 bis central bankers'speeches states. [ 16 ] oecd analysis, for example, estimates global revenue losses from tax avoidance to be in the range of 4 % to 10 % of corporate income tax revenues. these effects occur when countries are not large enough to exercise regulatory power against mobile capital or cross - border firms. but it is harder for this to happen at the level of the eu, since it represents a market that companies can ill afford to leave. having regulatory power at the eu level enables eu countries to exercise sovereignty in the areas of taxation, consumer protection and labour standards. first, the eu gives its members the capacity to prevent multinationals from avoiding corporation tax by exploiting loopholes or extracting subsidies. this is a complex area, but some recent progress has been made on this front. new european rules have entered into force this year to eliminate the most common corporate tax avoidance practices. [ 18 ] and while the ecj recently ruled against the commission in a tax exemption case, it also recalled that special tax deals between multinationals and individual countries can constitute illegal state aid, which the commission has the right to examine. second, the eu offers much greater possibilities to defend consumers ’ values and ensure that they are treated fairly within the european market. this has been visible in the eu ’ s ability to enforce its values concerning privacy through the general data protection regulation. [ 20 ] it has been visible too in eu regulations to bring down mobile phone roaming charges for consumers within europe, [ 21 ] or to ensure that they cannot be charged more for cross - border payments in euro within the eu than they would be for national transactions. the third advantage is that countries have the possibility to coordinate within the eu to defend social protections without imposing trade restrictions. through the charter of fundamental rights, eu law has reduced the possibility of unfair competition from jurisdictions with laxer labour laws. and it has also helped raise labour standards within the eu. a case in point is the european directive on part - time work in 1997