1 June 2011
1.2 European Union Enlargement
The European Union has grown in size from the six founding Member States in the early 1950s, to the 27 current Member States. There were five successive enlargements within that period, with the largest occurring on 1 May 2004. On that date, 10 new Member States joined. The EU reached its current size on 1 January 2007 with the addition of Bulgaria and Romania.
In order to join the European Union, a country must fulfil the economic and political conditions generally known as the Copenhagen Criteria (after the Copenhagen summit in June 1993). These criteria require that the candidate country must have achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; the existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union; and the ability to take on the obligations of membership including adherence to the aims of political, economic and monetary union. In addition, each already-existing Member State and the European Parliament have to agree.
1.2.1 Further Enlargement: Croatia
The next new member of the EU will likely be Croatia. Its entry negotiations began on 20 October 2005, and the Commission reports that negotiations on fulfilling the Copenhagen criteria and implementing the acquis communautaire (the body of EU law) are proceeding well. After Slovenia, Croatia is said to have recovered with the least problem from the break-up of the former Yugoslavia and so expects that it will become the second former Yugoslav state to become a Member. It has a stable market economy and – according to the Commission – better statistical indicators than some of the countries that joined in 2004.
Croatia had initially hoped to join the Union in 2007 with Romania and Bulgaria, but accession was pushed back till 2009 in order to give Croatia time to make necessary changes. The failure of the Constitutional Treaty (described below) in 2005, caused further delays and it is now unlikely that Croatia will join before 2012.
1.2.2 Further Enlargement: Iceland
Following the collapse of the Icelandic economy and the rapid devaluation of its currency in 2008-2009, Iceland formally applied to join the EU in July 2009. Iceland has been a member of the European Free Trade Association since 1970 and a member of the European Economic Area since 1994, and thus has already implemented much of the EU acquis communautaire into its national law. As a result, negotiations for Iceland's accession to the EU are expected to proceed rapidly.
1.2.3 Further Enlargement: Turkey
As for Turkey, after a wait of 42 years, on 3 October 2005 that country was finally given the go-ahead to begin the formal process of becoming a Member State of the EU. The Turkish negotiations, which began on 20 October 2005, are expected to take about ten years. It is likely that Turkish citizens will also face, thereafter, a transitional period similar to that which some EU States have imposed on those of the new Members (since 1 May 2004), that will restrict their ability to work elsewhere in the EU.
Hong Kong businesses interested in an enlarged EU market should keep an eye on the progress of talks particularly with Turkey, as the latter’s accession will have a significant impact on EU trade policies and relations with third countries. For instance, Turkey would have enormous influence in the decision-making process for legislation (directives, regulations and framework policies, which could have an impact on trade), as the qualified majority voting structure within the Council, which gives greater weight to Member States with larger populations, would make it on par with the largest existing Member States, e.g., Germany.
Although most Hong Kong traders will have, by now, adjusted to the most recent enlargement by ten new countries, the Commission’s reckoning for enlargement with Turkey is that such a situation will be quite different. Turkey’s enlargement would be different from previous enlargements because of the combined impact of Turkey’s population, size, geographical location, economic, security and military potential.
Even though the economic impact of accession would be relatively small in the short term, in the long term it would increase due to the importance of the Turkish market and the rapid growth expected in that country.
With regard to tariffs on goods commonly entering Europe from Hong Kong and the Chinese mainland, an enlargement involving Turkey would not change very much for traders. Its customs union with the EU means that Turkey has already been required to align tariffs to those of the EU. As for anti-dumping or other trade protection proceedings, should Turkey’s accession take place, it will have to participate in proceedings initiated by the EU. Moreover, any measures applied independently of the EU will terminate, while the EU’s ongoing measures will have to be taken on by Turkey and applied to imports, e.g., from the Chinese mainland, entering that country.
1.2.4 Further Enlargement: the Former Yugoslav Republic of Macedonia
The Former Yugoslav Republic of Macedonia officially became a candidate country on 17 December 2005, and has steadily been preparing for accession. The most recent progress report on Macedonia, published on 9 November 2010, states that significant progress has been made by Macedonia regarding the Copenhagen criteria. The Commission has recommended that the Council open formal accession negotiations with Macedonia, though the Council has yet to act on this recommendation.
1.2.5 Further Enlargement: Other Countries
Other contenders for candidacy are the following: Bosnia and Herzegovina, Serbia, Montenegro, and Albania. These states are currently not formal candidate countries, but only “potential candidate countries”.
After them, Belarus, Moldova, Kazakhstan and Ukraine are all “candidate hopefuls”. It is estimated, however, that they will probably remain outside the EU, at least for a significant amount of time, particularly as there is ever-increasing anti-enlargement sentiment within the current EU population.
 These are as follows: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.
 The European Economic Area, which includes the 27 EU Member States along with Iceland, Liechtenstein and Norway, consists of a slightly looser form of cooperation than the EU, though all EEA Member States must implement a large portion of EU law into their national legal systems.