EU enlargement: an industry view

1. The next EU enlargement to take in the CEEC countries will be more difficult than previous enlargements; 2. It will require transitional mechanisms for sectors such as sugar where there are large price differences between the EU and its new members; 3. In preparing for EU accession, the principal difficulty for the CEEC sugar sector will lie in raising sufficient resources to allow the sector to be modernised and restructured so it is competitive in the Single Market. The major issue here is the cost of processing facilities which are highly capital intensive; 4. During the pre-accession phase, however long this maybe, restructuring of CEEC sugar industries will be dependant on consistent domestic support policies being applied to allow a sufficient level of profitability so that investment funds can be attracted: 5. In this regard, the provision of structural adjustment funds by the EU as part of its pre-accession aid is also potentially highly significant; 6. The application of the EU sugar regime will require production quotas for CEEC sugar industries. The size of these quotas will be constrained by whatever export limits have been negotiated in the GATT by individual CEEC's, plus the Commission's principle that the producer levy situation for existing EU sugar producers should not be worsened; 7. Finally it must be borne in mind that the sugar regime itself may undergo change due to the fulfilment of the EU's GATT constraints (particularly as a consequence of the next round of agricultural trade negotiations in the GATT/WTO). As a result at least some of the CEEC's could be chasing a moving target during their negotiations for entry.