Something similar to the Richter scale clearly is needed to measure the impact of the events shaking the world. The India-EU Summit in Copenhagen, attended by Prime Minister Atal Bihari Vajpayee and the Danish Prime Minister, would measure two out of ten on such a scale, in terms of its global impact. The event that would score eight, however, is the coming enlargement of the European Union (EU).

?India welcomed the enlargement,? according to the joint press statement issued at the end of the half-day summit on October 10. Speaking at the India-EU Business Summit?s inaugural dinner, external affairs minister, Yashwant Sinha noted that ?the larger enlarged EU, with about half a billion people and the largest GDP in the world, will be an extremely important and interesting partner.? He added, ?We are looking forward eagerly and with high expectations to the further expansion of the EU.?

The fact is that if all goes according to plan, 10 countries, eight of them from central and east Europe, will join the present 15 members in the spring of 2004. The result will be the creation of the largest trading bloc in the world. Last year the 10 potential new members accounted for some 10 per cent of total EU imports, as compared to India?s 1.2 per cent. The EU?s imports from Poland alone represented 2.6 per cent of its total imports. The Czech republic was next, with 2.5 per cent of total EU imports, followed by Hungary, with 2.4 per cent.

In other words, these three countries accounted for 7.5 per cent of EU?s imports in 2001. They were marginally ahead of China (7.4 per cent), which is the second largest exporter to the EU, after the United States (19 per cent). The message to the Indian business community is clear: it will have to make sure that both the Indian government and the EU authorities implement the recommendations of two successive India-EU business summits to two successive EU-India political summits.

This is essential if India is to be competitive in the coming 25-nation EU. The outlook so far is not very good. The recommendations of the second India-EU Business Summit, held in New Delhi last November, still await implementation. These recommendations, relating to food processing, mechanical engineering, information technology and telecommunications, have been reshaped by a working group of EU and Indian officials. Their implementation is still awaited, however. The best the Copenhagen political summit could manage, under the circumstances, was to ?commend? the civil servants involved for ?the steps taken towards finalisation of an action plan to implement industry?s joint recommendations?.

The third India-EU Business Summit, held in Copenhagen the day before the political summit, was a great success by all accounts. It adopted specific recommendations to the political summit in four new sectors ? biotechnology, textiles and clothing, power and energy, and financial services. The political summit duly expressed its appreciation of ?the continued efforts and contribution of our trade and industry for tabling further similar joint recommendations.?

But, such are the rules of the game that the political summit cannot act on them until it meets again in a year?s time. EU sources here note that the second set of recommendations represent ?a definite improvement in terms of quality and feasibility over the first.? But, they also point out that in the absence of a determined political action the current EU-India Joint Initiative for Enhancing Trade and Investment, which has given birth to these recommendations, ?will peter out in the sands of Rajasthan.?

Time is certainly not on India?s side. The European Commission (EC), which has been conducting the entry negotiations with the 12 candidate countries, has recommended to the EU?s 15-member states that these negotiations be concluded with 10 of them by the end of this year. And this is exactly what the EU?s presidents and prime ministers are expected to do when they meet in Copenhagen in December for their own 15-nation summit.

EU representatives are pointing, of course, to the benefits to exporting countries from the forthcoming enlargement. Exporters will benefit from the fact that the 25-nation EU will have a single set of trade rules, a common tariff, and a single set of administrative procedures. While the enlarged EU will certainly be a more competitive market, as the world?s biggest market it will also be the most attractive. In this sense it will present exporters in non-EU countries with even greater opportunities.

Even so, India?s textile and clothing exporters will have to watch their east European rivals closely. Indian exports to the EU came to $2.8 billion last year, as against Poland?s $1.7 billion, the Czech republic?s $1.1 billion and Hungary?s $1.0 billion.

These three countries already enjoy quota- and duty-free entry into the EU. It can be argued, therefore, that full EU membership in 2004 will not make much difference. But this is not altogether correct. The fact is that the European clothing industry is likely to shift an even higher proportion of its output of standard items to the candidate countries.

Should Indian manufacturers follow suit? After all, the quotas currently applied by the EU on imports from India will end in December, 2004, with the expiry of the WTO Agreement on Textiles and Clothing. In any case, the Indian textile and clothing industry is trying to make the necessary structural adjustments, in order to compete more effectively in the post-2005 era of increasing trade liberalisation. The thrust of the joint recommendations to the Copenhagen political summit is in this direction.

What is more, for the first time both the European and Indian industries seem to be agreed on the need to work together, and are even prepared to set up a joint working group at industry level to define possible areas of co-operation. A joint working group is being set up, in fact, to look at market access conditions in both the EU and India, and report to the fourth India-EU Business Summit in a year?s time.

Enlargement is not inevitable, of course. October 19 could in fact mark its postponement, perhaps for a very long time. This is because Ireland is holding a referendum that day on the Treaty of Nice, which sets out the institutional machinery for an enlarged EU. Should the Irish vote against the Treaty for a second time, it will be back to square one for the present 15-nation EU. Although the 10 candidate countries have made heroic efforts to get their economies into shape for full membership, the fact remains that it has been an uphill task so far. Once inside the EU, they may find the going even harder, given that they are considerably poorer than the present member states, and that both their industry and agriculture need to be modernised. The fact is that the GDP of a 28-nation EU would be only 6 per cent greater than the GDP of the present 15-nation EU.

But enlargement is being driven by political considerations as much as economic ones. For the EC president, Romano Prodi, enlargement will unite a continent artificially divided by history. It will, therefore, mean greater political stability throughout much of Europe. And Mr Prodi is confident that the new members, although poorer, will be able to catch up, just as Ireland, Spain and Portugal, who joined the EU in the 1970s and 1980s, have done.

The 13 candidates for membership are: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, Slovenia, Bulgaria, Romania and Turkey. Bulgaria and Romania are not expected to join the EU before 2007. Turkey?s accession to the EU remains something of a question mark. Officially, it does not qualify as yet on political grounds. But the greater stumbling block may be the fact that Turks are Muslims.