The European Union: Another Round of Enlargement?

The European Union: Another Round of Enlargement?

Yontem Sonmez (Manchester Metropolitan University, UK)
Copyright: © 2015 |Pages: 15
DOI: 10.4018/978-1-4666-7308-3.ch007
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In spite of the recent rise in Euroscepticism across most of Europe, owing to the recent Eurozone crisis and reflected by the European Parliament elections of May 2014 where far-right parties gained strength, there is little evidence to suggest that the enlargement of the EU will soon stop. The membership negotiations have started with Turkey, Iceland, Serbia, and the Former Yugoslav Republic of Macedonia. In terms of both economic and physical size, Turkey is more influential than the rest of the candidate countries. Therefore, the purpose of this chapter is to provide some background information on the progress of each candidate and potential candidate country on the way to EU accession and compare them with the current EU28 members in order to emphasize the main similarities and the differences. Finally, a literature survey of the economic implications of a potential Turkish EU membership is also provided as a case study.
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Background: Regionalisation In Europe

Regionalisation is the process of liberalising trade, in most cases not only by tariff-cutting, but also by the harmonisation of rules and regulations shaping the trade policies as well as the regional rules on investment, competition, labour, etc. as a result of the mutual negotiations of such commitments. According to Bhagwati et al. (1999, p.3), regionalisation can be defined broadly as ‘preferential trade agreements among a subset of nations’.

Bhagawati et al. (1999) argue that the main reasons for the second wave of regionalism or to the revival of regionalism in the 1980s, is due to the conversion of the United States of America (USA) to regionalism, although it had always been a supporter of multilateralism previously. The establishment of the Single European Market (SEM) in 1993 and the eastern enlargement of the EU in 2004 were also important steps in the second wave of regionalisation.

The major characteristic of the second wave of regionalism, also called new regionalism, is the growing number of agreements across regional groupings, as well as across developed and developing countries, their deep integration, i.e. not only by reducing or eliminating the trade barriers in commodities but with real and financial capital mobility, free labour mobility, domestic tax and subsidy policy harmonisation, macro policy harmonisation, institution reforming and building, communications and transportation infrastructure development, legal rules and regulations harmonisation for markets and monetary union (Lawrence, 1996; Burfisher, Robinson, & Thierfelder, 2003; Whalley, 2008).

During the global recession of 2008-2009 global trade decreased by 29%, that was at a faster rate than the global GDP (Eaton, Kortum, Neiman, & Romalis, 2013). One of the reasons for the reduction in the global trade volume was argued to be the tendency of the national governments to re-introduce protectionist measures in order to deal with the negative consequences of the global recession (Brock, 2009). It is also estimated by Fontagné et al. (2014) that the share of trade within major regional trade agreements might decline in the future as the trend towards increased regionalism could be reversed (WTO, 2014a).

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