Eastward expansion of the European Union has profoundly shaped the economic landscape of both its member states as well as those lying outside. This trend is expected to continue. To deal with this and related issues,this booklet traces the evolving expansionary path by linking the motivating force with effects arising within the EU and beyond. It begins by sketching both the scope and characteristics of the current enlargement. The decision-making processes and the accompanying criteria set out by Brussels are highlighted in this pursuit. Secondly,an attempt is made to reconstruct the salient trade and investment patterns,the coordinating area,as well as country,based interactions that emerge in tandem and to demonstrate,in reflection of their relative significance,the modes of behaviors of EU member countries,as opposed to their foreign counterparts. This is carried out by differentiating the objects of observation and by selectively showing their potential gains/losses from trade in accordance with the progress of deepening of integration,namely from initial liberalization,to the completion of internal market,and the adoption of common commercial and trade policies. Main findings and implications of the present study are summarized as below:
-Current wave of eastward expansion and sustained perfection of the EU regulatory framework visibly lend force to Union-wide institutional innovation unforeseen in the contemporary world.
-The modus operandi of the EU Single Market,as a regional bloc par excellance,outweighs other regional/sub-regional set-ups by brilliantly incorporating the virtues of both in-house design with the globalizing market mechanism.
-With reference to “trade creation” v.s. “trade diversion”,a chain of dominant,respectively,lesser impacts are gathering momentum. Among them: (a) increasing intra-EU trade occurs at the expense of extra-EU trade on the eastern fringe; (b) proportionately greater panEuropean volume of trade rises relative to those adjacent to the enlarged EU; (c) constellation of either/both (a) or/and (b) in weaker forms.
-Against the scenario of “investment creation” v.s. “investment diversion” : EU expansion has triggered off fierce competition for investment fund,i.e. between the emerging new members and (a) their more or less resourceful hosts,(b) the less developed southern European states,(C) the Asian NIEs,etc.,thus resulting in continued sectoral inasmuch as industry reshuffling of market shares of EU and non-EU countries.
-“Trade-displacing” in parallel with “trade-enhancing” effect : direct investment of the multinationals in EU has been taking placing with a view to breaking,respectively,overcoming the EU “open protectionism” scheme,as the case may be,so to realize scale economy in the borderless internal market.
-The multinationals are redrawing as well as consolidating their global “supply-chain” in reaction to the new stimuli as provided by the shifting basis of company’s competitiveness as a result of EU
