A development perspective on EU trade policies and their implications for Central and Eastern European countries

This paper discusses the issue of adjustment in the EU and evaluates the EU track record in key industries of interest to developing countries. It also evaluates the EU commitment to environmentally sustainable policies and reviews the various EU technical regulations or social policies against the above two perspectives. It then reflects on some of the dynamic forces for change in the EU and the positive role they can play in advancing trade liberalisation and development. The paper then attempts to draw out some implications for the CEE countries.The paper argues that the EU needs to undertake radical adjustment to fulfil its commitment to trade liberalisation and efficient markets in order to have a positive impact on economic development and the reduction of poverty in developing countries. Moreover, the EU’s commitment to environmental sustainability will be vie wed sceptically if it does not address the issue of its own trade policies that contribute to environmental degradation, particularly in agriculture and fisheries. It also argues that EU technical regulations or social policies run the risk of being captured by rent-seeking protectionist interests unless there is great vigilance, transparency and participation by all interest groups, both within and outside of the EU. The paper further points out that EU enlargement looms large in the process of the EU CAP reform, making current levels of protection in the EU-15 CAP unsustainable when it includes the acceding CEE countries. In addition, the paper asserts that a number of other dynamic forces within the EU are driving the process of reform in the direction of greater liberalisation.Finally, the paper argues that it is in the interests of CEE countries to support reform of the CAP and the reduction of protection in the EU, so that they can compete more effectively within the EU and make the necessary adjustments to compete globally. In this manner, the CEE countries can become a force within the EU for global trade liberalisation, sustainable development and a more equitable global trading system.