Regional Market Areas at the EU Border

Abstract

With the enlargement of the European Union (EU) and the negotiations with potential member countries and further candidates, the question arises how to form the relationship to non-EU countries. The enlargement leads to new borders in new areas and to enlarged external frontiers with cross-frontier trade and markets. Therefore, at the new EU border many new regional markets will emerge, in which - on the basis of lower production costs in many industries in non-EU countries - an import pressure arises. This import pressure calls for a political answer. In the past, the EU gave many different regional answers which produced preferential trade for more than 25% of the whole EU trade with non-EU countries. In 1996, there was a hierarchy of EC trade regimes: in Eastern and South-Eastern Europe, a free-trade area (Europe Agreements) covered Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic and Slovenia. In the Mediterranean area, there was a custom union with Turkey; free trade areas included Israel, Cyprus and Malta. Non-reciprocal contractual preferences were agreed with Algeria, Egypt, Jordan, Morocco, Lebanon, Syria and Tunisia (). This trade policy followed the lines of general foreign policy, and the traditional policy of some EU states was based on interests in certain regional areas. Furthermore, the trade policy of the EU may not be understood without an investigation of the design and evolution of EU institutions ().