w 109 long-run economic aspects of the european union's eastern ...

LONG-RUN ECONOMIC ASPECTS OF THE EUROPEAN UNION’S EASTERN ENLARGEMENT78common trade policy implies (at minimum) a shift from a free trade area to acustoms union (without agriculture). It would bring the ‘partial-members’ to astatus already accomplished by Turkey. Even without agriculture, such a customsunion is GATT-compatible because it is explicitly meant to be completed withagriculture later on. But it would create enormous complications during a decadeor so. It is clear that partial membership is meant for a second tier of applicantcountries, which are behind in acquis adoption and enforcement and which haveproblems of transition, stabilisation and competitive performance. This thereforeimplies that an EU -20 or EU -21, would be subjected to complex agricultural transitionperiods, resulting in higher protection against the export from the ‘secondtier’countries to the ‘first-tier’ countries. In any event, the first tier will obtainaccess to the agricultural market of the EU -15, thus rendering it far more difficultfor the second tier to export to the EU -15. To prevent this, the EU-15 would have toextend the free trade areas with all the CEECs to agriculture, so that the second tieris not grossly disadvantaged. For industrial goods a customs union can then beagreed. Yet a free trade area in agriculture, with the EU -15 (or perhaps the EU -20)applying the CAP, is nothing less than a nightmare scenario, due to its complexityand incentives for fraud. And all of this would apply for only a limited period oftime, until graduation to full membership. More likely, therefore, the EU wouldrather opt for compensations in terms of market access on a case by case basis, inanalogy to what Tunisia and Morocco obtained with the accession of Spain andPortugal. Such compensatory negotiations would in any event be inescapable oncea first group will enter the Union.Another non-trivial issue related to the customs union for a group of 28 states isthe establishment of a common competition policy. The Europe Agreements entaila commitment to introduce national competition policies (based on Articles 81, 82and 86, EC) as well as some kind of self-discipline in state aids. Merger control hasbeen introduced in Central Europe, although it is not in the Europe Agreements. Itwould require either a treaty change or a kind of EEA arrangement for a commoncompetition policy to be possible.The institutional box in figure 4.1 suggests there is access to the European Court ofJustice (ECJ), presumably limited to the areas falling under the scope of partialmembership. The legal complications here are enormous. Probably the least complicatedsolution would be a special court (similar to that of the EEA) for relationswith the partial members, subject to a treaty, with full ratification procedures, yetwithout touching the institutional EU acquis itself. The SER proposal entails threenon-IM elements: decision-making, foreign and security policy and structural andcohesion policy. It is unclear what the participation in decision-making (Council,EP) exactly means; participation without votes (as sometimes occurs in EMUissues), full participation or something complex in-between? The political implicationsof these variants differ rather drastically, both for Brussels/Strasbourg andfor the domestic politics of the partial members. This is important because itshould accentuate the difference between the EEA route and the membership route.