In order to forecast future capacity problems and public investment in the existing transport sys-tem long-term dynamic physical trade flows are modeled. The methodology involved several components. First, a dynamic panel data model for foreign trade is estimated for the EU15 plus two EFTA countries on the period 1967-2002. This involves the estimation of a number of fixed effects for each country. In order to apply the model to the new EU countries, similar fixed effects must be specified for these countries, which is the second step in the methodology. The third step is the disaggretion of growth rates of aggregate bilateral trade to growth rates for each type of commodity. These growth rates of bilateral trade among 26 countries ordered by type of goods are then inserted into a freight traffic model in order to project modal split and route choice. The EU enlargement and the integration process of the new members have been crucial factors in solving the problem.nces of economic growth and the effect of the integration of the new EU members on the trade flows. Gravity mod-els' capacity for explaining the trade flows between countries has largely been verified empirically. Gravity models claim that the size of the trade flows is explained by three factors reflecting the potential supply of the exporting country, the potential demand of the importing country and the commercial flow resistance between the partners. The gravity equation is obtained by replacing these three factors by the underlying variables, i.e., national income, population, distance and the existence of trade agreements. First, the methodology consists in estimating the coefficient of the so-called gravity variables in order to evaluate their explanatory power in the exchange explanation. A second step consists in applying these estimates to each country data. The gravitation model is estimated on a panel sample for the period 1967-2002 from the CHELEM database. This database has been constructed by the Centre d'Etudes Prospectives et d'Information Internationale (CEPII). The database contains among other time series for the world GDP, populations, real exchange rates, values of exports and imports in constant prices. Data on distances between countries and dummies for common frontiers and common languages are also available. It is not considered relevant to estimate the model on trade flows involving the new EU members, as the data covers a time period when they have been undergoing dramatic transition. This means that fixed effects are not available from the estimation for these countries. These are instead estimated in an auxiliary regression. We then translate the growth in trade into a growth in tons and allocate the general growth into a growth per commodity. A set of growth rates for bilateral trade by each of eleven commodity types is obtained for all relations between the 26 countries. These growth rates are applied in a freight traffic model, which provides modal split and route choice. Results are illustrated on maps, particularly those affecting Denmark and the Nordic countries. For the covering abstract please see ITRD E135207.
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