EU Enlargement: External Economic Implications

Jacques Pelkmans and Jean-Pierre Casey
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Jacques Pelkmans: Senior Research Fellow, CEPS (Brussels); Visiting Professor, College of Europe (Bruges)
Jean-Pierre Casey: Azurewealth; Visiting Professor, College of Europe (Bruges)

No 4, Bruges European Economic Policy Briefings from European Economic Studies Department, College of Europe

Abstract: Unlike some previous EU enlargements (e.g. with the UK and with Spain/Portugal) the present EU enlargement to Central Europe has not prompted much, let alone a fierce, debate about the external dimension. This BEEP briefing discusses the main economic aspects of the external dimension, in particular whether there is a threat of (how much) trade diversion. Attention is paid to the three main topics of interest for third countries: industrial trade effects, impact on FDI and agricultural trade effects. Agriculture is arguably the most sensitive of the three, given the very high CAP border protection, and although large-scale trade diversion may eventually occur under certain scenarios (such as an unreformed CAP), these fears are greatly exaggerated in the short to medium term (5-7 years): the time frame considered is therefore all-important. This conclusion becomes less surprising if one takes a closer look at the current sorry state of agriculture in the CEECs. Separate sections treat the somewhat sensitive subject of U.S.-CEEC Bilateral Investment Treaties, as well as the long-term development perspective, which addresses the prospects for catch-up growth by the accession countries. In the end, non-European stakeholders in the accession process will greatly benefit from sustained catch-up growth by the CEECs, which are locking-in deep reforms due to EU accession.

Keywords: European Union; Enlargement; Trade (search for similar items in EconPapers)
JEL-codes: F02 F10 F15 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2003-04
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Citations: View citations in EconPapers (6)

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