Workshop on Trade, Business and Investment in a Wider Europe
(Geneva, 7 April 2003)
Opening Statement by Mrs. Brigita Schmögnerová,
It is a great pleasure for me to welcome you to Geneva to the UNECE Workshop on Trade, Business and Investment in a Wider Europe. This meeting takes place under the auspices of the UNECE Committee for Trade, Industry and Enterprise Development.
This Committee works towards creating a supportive environment for trade, industrial and enterprise activities, and assisting in the integration of all countries - particularly the emerging market economies - into the European and global economy.
The enlargement of the European Union in 2004 to include 10 new members will greatly change the framework for trade, business and investment in the region. The enlarged Union will have more than 450 million inhabitants. Its frontier will shift dramatically to the south and to the east.
Todays Workshop will explore the shape and direction of economic integration in the region in the next decade. I hope it will provide a valuable opportunity for Governments, the business community, civil society and academic and research institutions to think beyond the process of EU enlargement and the WTO trade negotiations.
UNECEs HISTORICAL CONTRIBUTION TO EUROPEAN INTEGRATION
UNECE has for over 55 years been promoting cooperation in Europe. It was UNECE that originally drew up the European Unions Single Administrative Document, which has become the cornerstone of international trade in Europe.
The European integrated railways networks, and the motorway network, are also brainchildren of UNECE. Both have greatly eased the movement of goods, people and ideas throughout Europe.
In trade and transport facilitation, Electronic Data Interchange (EDI), UN/EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) and the TIR Convention, are just a few examples of UNECE work.
During the period of the Cold War, UNECE was the only forum in which the two diametrically opposed systems could engage in dialogue and discuss economic cooperation. It was through this dialogue that UNECE was able to acquire intrinsic knowledge of the central and eastern European economies. It has been able to accumulate long time series of data and interpretations that provide a historical dimension indispensable to understanding the transition process. The annual studies produced by UNECE are valuable for decision makers at all levels of the government administration as well as for the business community and for scholars.
UNECE AND EU ENLARGEMENT
Today, we are facing new challenges and opportunities in the European region, with the political map due to be redrawn once again after EU enlargement. This enlargement will create particular challenges for the new neighbouring countries. UNECE wants to help in seeking solutions and bridging the gaps between the enlarged EU and the rest of Europe, especially South-Eastern European countries, Russia and other CIS countries.
Already the EU is one of the biggest strategic players in the UNECE. The enlarged EU will be an even more important economic pole. UNECE sees the integration process within the context of a Wider Europe as a building block for the future of a stable, prosperous and secure Europe.
In my view, the EUs new neighbouring countries should be further integrated into the enlarged EU and cooperate more intensively among themselves.
Building a free trade area in a Wider Europe that could eventually extend the Single Market would ensure the prospects of prosperity and security in Europe.
ENLARGEMENT: CENTRAL AND EASTERN EUROPE, THE CIS, THE SOUTHERN MEDITERRANEAN COUNTRIES AND THE EU
As of 1 May next year, the EU will consist of 25 countries. With a population of around 450 million, it will have a gross domestic product of almost 10,000 billion; the equivalent of more than 10 trillion US dollars. This will change fundamentally its political, geographic and economic weight on the European continent.
Promoting regional and sub-regional cooperation and integration are preconditions for political stability and consequently economic development throughout the non-accession countries. The EU is actively promoting a wide range of bilateral and multilateral initiatives to promote trade and cooperation with the neighbouring countries.
It is one of our priorities at UNECE to further increase our already close cooperation with the EUs new neighbouring countries. UNECE should reinforce its efforts to support its relations with the future EU border countries - Russia, the western CIS, South East Europe and countries in the Southern Mediterranean.
Many of the lessons we have learned in supporting the transition of Central and Eastern Europe to market economies are highly relevant to the CIS. UNECE is happy to offer its assistance in all fields of its expertise. Today, we are looking particularly at harmonization of technical standards and trade-related norms.
Implications of EU enlargement for the CIS, particularly the central Asian countries
Few studies have so far been undertaken to examine enlargement effects on other countries of the region, for instance, on those of Central Asia.
Russia, Ukraine, Belarus and the Republic of Moldova will obviously be the most affected, due to their more developed economic and social connections with both the EU and the acceding countries.
Most discussions on the implications of EU enlargement for the CIS focus on the countries sharing a common border with one or more candidate country. However, one may assume that to the extent that Russia is affected, there will be consequences for Kazakhstan or Kyrgyzstan, as most of the countries in the region are economically interdependent.
Studies of the effects of EU enlargement on some sectors like trade, and energy in non-acceding countries forecast some short-term negative implications that could be mitigated by increased cooperation in a Wider Europe. There is some dispute about the investment effects of EU enlargement on non-acceding countries. Most of the regions countries have already attracted FDI in their natural resources, especially hydrocarbons. New investment decisions by foreign and domestic firms, say, in Kazakhstan and Turkmenistan in this sector, will depend on the world oil price fluctuations. Since there is no obvious evidence that this will be influenced by EU enlargement, it is very uncertain that the candidate countries accession to the EU will influence investment inflows to countries in Central Asia, particularly in the energy sector. FDI in non-acceding countries in non-energy sectors will depend on further progress in reforms in the countries and could be accelerated by prospects for an enlarged free trade area.
Russia as a major player in the Central Asian region
Russias transformation has been one of the most significant features of the last 10 years. Its future relationship with the EU is thus an issue of profound importance for Europe.
Russia plays a leading role in the Central Asian region, as a legacy from the Soviet Union and also because of the scale of the Russian economy.
The so-called successor States have during the last decade opened up new channels of cooperation with the outside world, but they have also renewed their links with Russia. Most of these countries depend on Russia for their trade and for the transport of gas and oil.
For instance, in 1996, Kazakhstan and Kyrgyzstan signed a quadripartite agreement with Russia and Belarus, which supplemented the existing Customs Union by providing for the coordination of economic and social-cultural policies. Kazakhstan wishes to preserve its close relationship with the CIS in spite of the fact that in 1995 it became a member of the Organisation of the Islamic Conference (OIC) and the Islamic Development Bank.
Recently, on 23 February, 2003, President Putin and the Presidents of Ukraine, Belarus and Kazakhstan reached an agreement on the creation of a provisional joint economic space including the four countries mentioned before. The ultimate goal of this economic alliance will be the creation of a regional-integration arrangement with the intention not of replacing the CIS but of giving priority to economic links over political relations.
Russia and most of the CIS have Partnership and Cooperation Agreements with the EU. Currently, the EU and Russia are negotiating bilaterally to create a Common Economic Space, and we will undoubtedly hear more about this during todays meeting.
Southern Mediterranean Countries
Regional trade and integration is one objective of the EUs Mediterranean policy. The EU has Free Trade Agreements (FTAs) in place with the countries of the Southern Mediterranean within what is known as the Barcelona process. This process has since 1995 been the framework for the EU and the Mediterranean partner countries to recognise that these countries could benefit from their geographical proximity to form a closer association to create a wider area of economic cooperation and stability.
South East European Countries
As far as the South East European countries are concerned, we at UNECE believe that we must concentrate our technical assistance on this sub-region, especially Bosnia and Herzegovina, Serbia and Montenegro, The former Yugoslav Republic of Macedonia, and Albania. Following EU enlargement, these countries will have an even greater strategic geographical position.
I endorse and strongly support the EU approach to these countries which has already entered the so-called Stabilisation and Association Process (SAP), offering a prospect of further integration into the EU structures to the South East European countries when they have made more progress towards peace and prosperity.
Regional integration is a source of innovation and progress in both institutions and standards. For economic agents and member States, regional and sub-regional integration organisations provide a stepping stone towards the global economy, and can help less-advantaged countries to manage the impact of globalisation. Regional and sub-regional integration can lead to the adoption of programmes or action plans to establish a set of guiding principles and commitments specific to the region and contribute to the development of global programmes.
The European market seems likely to become the world economic leader in the twenty-first century. To do so, it will have to meet several requirements, including closer integration of the economies of Western Europe, expansion into Central and Eastern and South-East Europe and association with the countries of the CIS.
I believe that the progress the EU has already made, as a uniquely successful experiment in regional integration, in building the EU-15 today and the EU-25 next year, will be a relevant example to other regions in two aspects: (1) how to promote reforms in order to make integration possible as in the case of candidate countries; (2) how to deal with globalization challenges.
Regional integration is the efficient avenue through which to integrate countries into the world economy. This is an instrument to manage the complexities of our interdependent, globalized world.
I see the role of UNECE becoming even more relevant in the coming years, especially in relation to the twin trends of globalisation and regional integration, offering as it does an open and accessible platform to all its 55 member States for economic integration within the framework of a Wider Europe but at the same time within the future closer European and transatlantic cooperation.
The Workshop on Trade, Business and Investment in a Wider Europe is the second workshop in the UNECE s project on Wider Europe. Earlier, the Energy Sector Wider Europe Roundtable, which took place in January this year, discussed implications of EU enlargement on the energy sector. The next workshops on Wider Europe will be focused on environmental and transport aspects.
Despite the comprehensive agenda of todays workshop, many trade-related issues might not be discussed. Therefore, I would appreciate it if, as a part of your conclusions, you would propose those issues which are indispensable, like customs matters, visas, other legal instruments for cross-border cooperation, harmonization and standardization, the TIR convention, etc., which will need further attention if the development of trade between the enlarged EU and non-acceding neighbouring countries is to be assured.
I wish you successful deliberations.
Thank you for your attention.