[ARCHIVED CONTENT] DTI - Europe & World Trade

Some of the benefits of enlargement are flowing already. The accession countries have been opening their markets and reforming their economies in preparation for EU membership. They have established stable democracies. Their economies are growing fast, attracting high levels of foreign direct investment. The majority of their trade is with the EU. UK Trade & Investment estimate that 15,000 or so UK companies are already exporting or investing in Central Europe.

Will the competitiveness of UK business be affected by enlargement?

EU Enlargement offers UK business enormous opportunities, as the EU becomes the largest single market in the world, with 450 million consumers. Every country joining the EU must accept all the EU laws and practices as a condition of entry, providing a level playing field for business. Joining the single market requires the accession countries to remove non-tariff barriers to trade. Mutual recognition of national standards will make it easier for UK companies to export to the accession countries as they meet the requirements of EU legislation. The UK should be well placed to compete in this market on the basis of our supportive business environment and highly skilled and flexible work force. UK companies will also benefit from some cheaper inputs, technology transfers and economies of scale. Independent research estimates that the accession of the Central and Eastern applicants will boost UK GDP by �1.75bn per year.

Will Britain still receive EU structural funds after enlargement?

Spending in Britain from the EU�s structural funds program is guaranteed until 2006, regardless of enlargement. After 2006, the amount of structural funds that Britain receives will depend on the agreement reached between Member States for the next financial period (probably 2007-2013).

What are structural funds?

Structural funds are the EU's main instruments for supporting social and economic restructuring across the Union. They account for over a third of the European Union budget. The UK's allocation from the structural funds for the period 2000 - 2006 is over �10 billion.

How will the labour market operate in the enlarged EU?

Due to popular fears in some current EU members about a mass influx of workers from the new members, transition arrangements of seven years were agreed with the accession countries, before full free movement of labour would apply within the EU.

However, experience of previous EU enlargements, as well as current academic research, suggests that fears of mass migration are most probably not realistic. For this reason, citizens from the new Member States will be allowed to come to work legally in the UK from the date of their accession to the EU. At the same time, a worker registration system will enable the Government to monitor closely the numbers of people coming to the UK from the new EU countries and judge whether to impose restrictions if necessary.

Further information can be found on the Home Office Website.

What measures have been taken to prepare the EU for enlargement?

The Nice Treaty was designed to continue the effective working of the EU after enlargement. In addition to this, the current debate taking place at the Inter-Governmental Conference on the Future of Europe is considering whether further measures are needed.

Who are in European Economic Area (EEA) and how will Enlargement change how it works?

Trade arrangements between Iceland, Norway and Liechtenstein and the EU are governed by the European Economic Area (EEA) agreement. After EU enlargement the EEA agreement will remain but the accession countries will be covered by the agreement as EU members. For more information please see European Commission European Economic Area Webpages

How will enlargement affect the Lisbon Economic Reform Agenda?

The Lisbon agenda aims to make Europe the most competitive and dynamic knowledge-based economy in the world by 2010. Accession countries and New Member States share this goal and will therefore participate fully in the process of economic reform. They will benefit from the experience of existing EU members, just as the EU15 will benefit from their experience of managing wide-ranging structural change. Both older and new member states will be working together to create a dynamic economy for an enlarged EU.

The first accessions took place in May 2004. What about the countries that are not ready to join by then?

The UK does not want to see any artificial delays between the first and subsequent accessions. We want to see all countries admitted as soon as they are ready. The Copenhagen Council of December 2002 set a target date of 2007 for Bulgaria and Romania to join the EU, and Accession negotiations have been concluded ready for them to join on 1 January 2007. A detailed set of commitments have to be met in order for this to be achieved. The European Commission reports in June 2004 and December 2004 concluded that Croatia and Turkey fulfilled the Copenhagen political criteria for accession, and Turkey will begin accession negotiations on 3 October 2005 under the UK Presidency of the EU. Croatia was due to start accession negotiations on 17 March 2005. This has been postponed until it has met the criteria set down by the International Criminal Tribunal for the Former Yugoslavia (ICTY) in The Hague. We will continue to work to ensure that equal attention is paid to all candidates, whatever their position in the timetable, and that the applicants derive maximum benefits from the substantial pre-accession aid on offer.

If you have any questions please contact DTI�s enlargement unit:

Enlargement and Wider Europe Unit
European and World Trade Directorate
Department of Trade and Industry
1 Victoria Street
SW1H 0ET

Michael Porter
Tel: 020 7215 6078
Fax: 020 7215 2235
Email: michael.porter@dti.gsi.gov.uk

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