Enlargement process of the european union
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Enlargement process of the european union

Enlargement process of

the European Union

2004

Contents:

I. The enlargement of the European Union ………………………………………………..3

Substantial benefits for the EU……………………………………………4

Benefits for New Member States…………………………………………5

The “cost” of enlargement…………………………………………………9

Reaching progress in political and economical criteria……………… …11

II. The Baltic States in the European Union………………………………………13

The trade policy in Baltic States………………………………………….13

The integration’s impact to Baltic societies………………………………15

EU Enlargement is of highest priority…………………………………….16

Implementation of structural funds in the Baltic States ………………….18

Social consequences………………………………………………………21

Conclusion………………………………………………………………………..22

Bibliographical references……………………………………………………….26

I. The Enlargement of the European Union

Enlargement is one of the most important opportunities for the European Union at the beginning of the 21st century. It is a unique, historic task to further integration of the continent by peaceful means, extending a zone of stability and prosperity to new members.

In March 1998 the EU formally launched the process that will make enlargement possible. It embraces the following thirteen applicant countries: Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, the Slovak Republic, Slovenia and Turkey.

The European Union comprises now 15 member States, with a total population in excess of 375 million inhabitants. These member States have united for the purpose of economic and political cooperation. The EU can already look back on a history of successful enlargements. The Treaties of Paris (1951), establishing the European Coal and Steel Community (ECSC), and Rome (1957), establishing the European Economic Community (EEC) and EURATOM, were signed by six founding members: Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The EU then underwent four successive enlargements: 1973 – Denmark, Ireland and the United Kingdom; 1981 – Greece; 1986 – Portugal and Spain; 1995 – Austria, Finland and Sweden.

However, the enlargement facing the EU today poses a unique challenge, since it is without precedent in terms of scope and diversity: the number of candidates, the area (increase of 34%) and population (increase of 105 million), the wealth of different histories and cultures.

Third countries will significantly benefit from an enlarged Union. A single set of trade rules, a single tariff, and a single set of administrative procedures will apply not only just across the existing Member States but across the Single Market of the enlarged Union. This will simplify dealings for third-country operators within Europe and improve conditions for investment and trade.

Ten mentioned above countries will join the EU on 1 May 2004. As of their day of accession, the new member states will apply the EU’s Common Commercial Policy in its entirety, including the Common External Tariff, EU preferential trade agreements, WTO commitments and EU trade defence measures. They will also adopt internal market rules and benefit from the four freedoms set out in the Treaty.

The financial package for enlargement of the European Union, decided in Copenhagen in December 2002 and included in the accession treaties signed in Athens in April 2003, will take effect on 1 May 2004. The significant impact of enlargement on the Union finances was taken into account in the revision of the Financial Perspective decided by the European Parliament and the Council of the European Union in May 2003.

Substantial benefits for the EU

The EU consisting of 25 members will continue to speak with one voice in international trade fora. The addition of 10 Members will increase the EU’s authority and influence in trade talks.

The new Member States are young, dynamic and fast growing economies. This dynamism will benefit the whole of the EU.

Benefits for New Member States

An even larger market than before:

With a population of almost 455 million and a GDP of around €9231 billion, the enlarged EU will account for some 19% of world trade and be the source of 46% of world outward FDI and host to 24% of inward FDI.

The current European Union is already the largest single market in the world. There are no internal borders between the Member States and the harmonisation of regulations and standards ensures a freer circulation of goods and services than is possible within some countries. Enlargement will extend these characteristics to the acceding countries.

Third countries will benefit from an increased single market and a simplified and enhanced access to the current acceding countries’ markets.

A single set of rules for business:

Enlargement will extend the EU’s trade policy regime to the acceding countries. The current system, featuring a single trade regime for the EU and a different regime for each of the candidates, will disappear. A single set of trade rules, a single tariff, and a single set of
administrative procedures will apply not just across the existing fifteen member states but across the enlarged Union of twenty-five. This will greatly simplify the dealings that third country operators have within Europe.

Beyond the simplification of procedures, enlargement will bring a range of immediate and tangible economic benefits to third countries. These will arise out of the acceding countries adopting the same open standard of treatment of third countries which the current EU applies.

A very open economy with a high standard of rules:

For trade in goods the new member states will have to adopt the Community Common Customs Tariff (CCT) upon accession. The average weighted industrial tariffs of the acceding countries are in general higher than the 3.6% average for the EU; the same applies to agricultural tariffs. Thus, in most cases, third countries’ business will benefit from lower tariffs in their trade with new member states.

In the case of services third countries’ services providers will benefit from the implementation of the single market in acceding countries, where they will get the same treatment as in the rest of the EU.

For investors the very high standards of treatment currently afforded by investors in the EU will be applicable throughout the enlarged Union. The national treatment provisions for inward investors as set out in the Treaty of Rome will be extended to the new Member States. For instance, the right of establishment and free movement of capitals entrenched in the Treaty will be applicable to all companies of the new Member States.

As regards technical regulations and their impact on the openness of an economy, the „one standard for all“ principle of the single market will be extended to the acceding countries with the obvious advantages to third country suppliers. The advantages in terms of trade facilitation will accrue for the exporters of the third countries with which the Community has concluded mutual recognition agreements (or MRAs) as regards their exports to the new Member States.

There are some sectors where the European Union maintains some limited quantitative restrictions with third countries, notably in the cases of textiles and steel. Although the new member states will apply these restrictions as of their accession, the effect on third countries will be limited. Indeed, WTO rules foresee that all textiles and clothing quotas shall be phased out by 31 December 2004. As far as steel is concerned, the two EC agreements which foresee quotas run until 31 December 2004 and would disappear if the countries concerned joined the WTO before then.

Third countries will receive enhanced levels of intellectual property rights (IPR) protection in the acceding countries due to their adoption of EU directives in this field upon accession. The Europe Agreements already contain an obligation for the acceding countries to join the relevant international conventions in this area and bring levels of IPR to a similar level to that afforded in the EU.

At present no candidate countries is a member of the WTO’s Government Procurement Agreement (GPA). Upon accession, all will have to apply the EC directives on public procurement, which go beyond commitments in the GPA. In terms of the direct impact on market access for third countries, the application of EU public procurement rules, especially directive 93/38 which opened up procurement in the water, energy, transport and telecom sectors, will bring major benefits.

Likewise for subsidies: new member states’ subsidies will be brought within EU rules, which are in line with OECD and WTO disciplines. Once again this will benefit third countries by imposing stricter standards than the rules currently applied by the candidate countries. With accession, the new member states will lose their transition economy status.

The single currency and free border crossing

Single currency of all Member States is a great advantage primarily for peoples of those countries, because when crossing the borders of countries of the EU people wouldn’t have to worry about changing currency. As for entering another European country, people wouldn’t have to have such problems as preparing visa and other necessary documents.

Educational and working opportunities

After enlargement citizens of member States will receive the right to work in any European country as well as to increase their qualification abroad. Many people were waiting for such decision from the European Parliament, as a lot of people at present work not in their home-countries, due to that they had to gather many documents to get the working permit. But from the 2004, May 1 it will be much easier. Primarily this will be a benefit for third countries, which don’t have such rich market as in other more developed European countries, and can’t offer so many working vacancies for their own citizens. The same situation refers to students, who will get the right to study in any European university without additional payment as foreigners did before.

The “cost” of enlargement

Expenditure for the 10 new Member States, around € 11.8 billion in commitments, is to be entered into the EU budget to make it ready for 1 May. For 25 Member States, the budget stands at less than 1% of EU Gross National Income (GNI). These figures will obviously have to rise in the coming years to take account of the new funding challenges the EU faces. Budget Commissioner
Schreyer stated that with this move the budget was ready for enlargement. The year 2004 will see the phasing in of all expenditures agreed and the opening on equal grounds of all EU programmes for 75 million new citizens.

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