EU Enlargement: Implications for the New Member Countries, the Enlarged EU, and World Trade

By Nancy Cochrane and Ralph Seeley

Ten countries- Poland, Hungary, Czech Republic, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Malta, and Cyprus- are on track to join the European Union (EU) in May 2004. At the December 2002 Copenhagen Summit, the EU closed negotiations with the ten candidate countries and issued invitations to join in 2004. Accession could bring some significant changes in the structure of agricultural production and trade in the countries of Central and Eastern Europe (CEE).

The authors suggest short-term commodity impacts are not large. Recent ERS model results are used to suggest large increases in output of feedgrains and beef, but almost no change in CEE output of wheat, oilseed, pork or poultry output. The analysis focused on three countries Poland, Hungry, and the Czech Republic. Trade impacts are also likely to be small in the short-term. There could be increases in rye and barley, and an enlarged EU could become a small net exporter of corn. But in the longer term, however, both supply and demand side impacts could be significant.

The paper presents careful analysis and EU enlargements predictions for six main commodities; beef, wheat, course grains, pork, poultry, and oilseeds. The authors suggest on the supply side, enlargement will increase pressure for restructuring. On the demand side, EU membership could bring higher income to CEE consumers and thus higher demand. The authors concludes by restating their assumption on aggregate short term impacts of EU enlargement on EU commodity output and world agricultural trade will not be nearly as large as once feared. In addition the author also suggests that even though accession could be great for consumers as many are aware, it could bring hardship to many small farmers and processors in the CEEs. It is for this reason that while a majority of the population favor accession, a sizable segment of the farming community are bitterly opposed.

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