Lessons For South Asia In EU Enlargement Process

Written by Malcolm Subhan | Updated: Nov 4 2002, 05:30am hrs
The year is 2020. The heads of state of the South Asian nations have assembled in New Delhi to sign the Treaty establishing the Union of South Asian Nations. The preamble to the Treaty calls for the ever closer union of the peoples of South Asia. The conflicts which marked relations between the countries are a thing of the past; the new Treaty will create an area of lasting peace and prosperity.

This, of course, is a pipedream. But scroll backward from 2020 to April 2003, and move from New Delhi to Athens. The event expected to take place there six months from now was also a pipedream some 20 years ago, when an iron curtain divided western Europe from central and eastern Europe. Next April, Athens will witness the signature of the treaty leading to the enlargement of the European Union (EU) from 15 to 25 member states. Eight of the new member states* belonged to the Soviet bloc 20 years ago. However, together with Malta and Cyprus, they will enter the EU by June, 2004, in time to take part in the elections to the European Parliament. Another two countries Romania and Bulgaria are expected to join the EU in 2007.

It is enough to compare the events of the first half of the 20th century, with those of the second half, to realise how profoundly Europe has changed. The first half witnessed two world wars, which pitted principally Britain, France and Russia against Germany, and resulted in the deaths of millions of Europeans. The second half, although marked by the Cold War, also saw the gradual economic and political integration of western Europe, starting with France, Germany, Italy, the Netherlands, Belgium and Luxembourg. Britain joined the then six-nation European Economic Community (EEC) in 1973, together with Ireland and Denmark. Greece followed in 1981, Spain and Portugal in 1986 and Austria, Finland and Sweden in 1995.

The collapse of the Berlin Wall and the Soviet bloc opened the way for the EUs eastward enlargement. This historic process was launched in Copenhagen in 1993, when an EU Summit meeting set the terms for the entry of applicants from central Europe and the Mediterranean. Thanks to last weeks agreement between the EUs presidents and prime ministers on the financial issues related to enlargement, the EU can present its negotiating position on these outstanding issues to the 10 candidates in a few days time.

There should be a happy ending to the 10-year long entry negotiations when EU heads of state meet in Copenhagen in December. But what about other possible applicants for EU membership Any European state may apply to become a member, under the terms of the Treaty of Rome, which established the EEC in 1958, the earliest avatar of the present 15-nation EU. The Italian Prime Minister, Silvio Berlusconi, saw no reason to keep Russia out, following Moscows rapprochement with NATO in April. The Ukraine was invited to the first summit organised by Denmark, the current holders of the EUs rotating presidency. And if the Ukraine, why not Georgia also There are also those who favour EU membership for Israel. King Hasan of Morocco was tempted by the idea of EU membership for his country, but was politely shown the door.

Then there is Turkey, the last of the 13 current candidates for membership. Its application cannot be dismissed, but entry negotiations have yet to begin. Turkey can join the EU in principle i.e., when it has met the Copenhagen political criteria, which include democratic institutions and respect for human rights. At their summit in Brussels last week, the EUs political leaders welcomed the important steps taken by Turkey towards meeting these criteria, which they believed had brought forward the opening of negotiations. But the EU is waiting nevertheless for the outcome of the Turkish general elections on November 3.

The fact is that many Europeans would like to limit the EUs relations with Turkey to the existing free trade agreement between them. Turkey may be a full member of NATO, but geographically it is a Middle Eastern nation, and Muslim as well, and may, therefore, never become a full EU member. It could, however, block EU membership for Cyprus; hence Greece demands that the EU set a firm date for opening entry negotiations with Ankara.

But what would be the nature of a 28-nation EU stretching from Scandinavia to Asia Minor Jacques Delors, the former President of the European Commission, the EUs executive arm, has bluntly declared that allowing countries like Turkey, the Ukraine and Georgia to join the EU would change its nature. More to the point, so diverse a grouping of countries would find itself reduced to a free trade area (FTA).

But the driving force behind European integration has been political, best embodied in the vision of the former French President, Charles de Gaulle, of a Europe stretching from the Atlantic to the Urals. The Danish government sees its six-month presidency as a campaign to create One Europe. Indeed, Robert Schuman, the French Foreign Minister, who set Europe on the path to integration, declared in 1953, at the start of the Cold War, We must build Europe in the interest not only of free countries but also in order to be able to integrate the countries of eastern Europe, once they ask us to accept them as members.

Winston Churchill shared Robert Schumans views. But his successors favoured a European FTA; their initial response to the creation of the EEC was the creation of the European Free Trade Association in 1960. Hence, President de Gaulles decision to veto Britains entry into the EEC in 1962, which led to the immediate collapse of the entry negotiations. Some 40 years on, the present British Premier also believes that his countrys political future lies with the US.

Is the emergence of One Europe in the political interest of India In other words, are Indias interests better served by a genuinely multipolar world or by the global hegemony of the US Viewed from here, a 25-nation EU is in Indias political interest, particularly if enlargement allows the EU to adopt a truly common and independent foreign and security policy.

And what of Indias economic interests The continued integration of the 15-nation EU, through the creation of the single market, for example, has resulted in trade diversion: trade among the 15 member countries accounts for a larger proportion of the EUs total trade than trade with non-EU countries. Germanys imports from its 14 EU partners came to $276 billion in 2001, its imports from the rest of the world to $218 billion.

Even so, a 25-nation EU offers Indian exporters a larger, and almost certainly more dynamic, market. It can be argued that much of the trade diversion effect of enlargement has already taken place: the 10 potential new members already enjoy quota-free and duty-free entry into the existing 15-nation EU. Broadly speaking, between one-half and two-thirds of their global exports are to the EU as of now. These proportions will rise, as direct investment by the present EU countries increases, particularly in labour-intensive industries.

The EUs enlargement clearly represents a challenge to Indian exporters, which they can meet only by becoming more competitive vis-a-vis not only the 10 new EU entrants but also their competitors in East and South East Asia.

*The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak republic and Slovenia.