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Special Graduate Schools
Graduate School of International Studies
Department of International Business
International Business
3. Theses(Master)
EU Enlargement: Effects on Trade between India and the EU
- Author(s)
- Kalkar, Rahul D
- Advisor
- Kim, Young Kon
- Department
- 국제대학원 국제경영학과
- Publisher
- Graduate School of International Studies Ajou University
- Publication Year
- 2005-08
- Language
- eng
- Alternative Abstract
- I have tried to study the shape of things to come as a consequence of an Enlarged European Union and its impact on partner countries like India. Today, international trade and investment flows have become extremely dynamic and WTO is a major international arbitrator. Increasingly policies are being framed to bring about increased transparency and rules are being devised to ensure greater fairness in the global trading process. Thus, though there will be opportunities, there will also be challenges once the actual enlargement takes place. Nonetheless, the prime objective of ensuring peace and stability is beyond doubt as this has been the primary factor behind the continuous enlargement of the European Union since the 1950s. This is a challenging study, for a variety of reasons because, -As indicated, the process of integration has been on going for some years, which complicates the separation for analytical purposes of pre and post enlargement effects; -The overall patterns of trade and investment between India and both the EU 15 and the ACs is constantly evolving; -The implementation of EU Commercial is a complex process; -The response of enterprises to the changed political and commercial environment will evolve rapidly. The summery assessment of the study is, *The trade between the ACs and the EU is already substantially free due to the Europe Agreements and bilateral Free Trade Agreements. Thus an important element of the conventional analysis of trade creation or trade diversion is not directly relevant. Indeed the removal of the need for rules of origin certification under the bilateral trade agreements could serve to increase trading opportunities for India. *The enlargement process does involve the completion of the EU Single Market which involves significant investment by the ACs in meeting EU technical and SPS standards and in trade facilitation. Although third countries do not have the option of joining the EU, EU technical and SPS standards are imposed on third countries in a manner consistent with the WTO and trade facilitation initiatives have been taken with non-members. Thus, there could be increased co-operation between the EU and India in these areas of Standards and trade facilitation. *The critical issue in determining whether EU enlargement is trade creating or trade diverting is the height of the external trade barriers post-enlargement as compared with the external barriers pre-enlargement. We can say that for India, given the structure of its trade with the EU and with the ACs, the external trade regime of the enlarged EU will be significantly more open post-enlargement. The quota arrangements under the WTO Agreement on Textiles and Clothing is already been eliminated by January 1, 2005. Now this elimination of quotas for textiles and clothing is not directly related to enlargement, but the consequence will be that the combined EU-AC market will be more open to imports of textiles and clothing than at the present. Thus, in the case of India and in light of the structure of Indian trade with the EU and the ACs, EU enlargement will be on balance trade creating in the case of India *It is also more likely that trade creation will dominate trade diversion where there is significant potential for economies of scale and increased intra-industry trade. This is certainly the case for EU enlargement since there are already intensive trade links between the ACs and the EU and the geographically contiguous markets increases the opportunities for integration of supply chains and increased intra-industry trade. This is a competitive challenge to India to improve its trade and investment climate and to position itself to take advantage of emerging opportunities. The main conclusion is that the completion of the Single Market and the harmonisation of the external trade regime that are the key features of the enlarged EU are unlikely to lead to significant trade or investment diversion impacts for India but the trade and investment creation impacts will predominate.
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