CIS-7 Perspective on Trade with EU in the Contextof EU Enlargement

The paper analyses possible consequences of the EU enlargement on the EU trade with the Commonwealth of Independent States (CIS). It considers the current situation in trade between the two groups of countries, describes the factors limiting this trade, and discusses the opportunities for the trade associated with the EU accession of the Central and Eastern European countries with strong historical ties to the CIS. The paper concludes that the EU enlargement creates some potential for expansion of trade and exports from the CIS to Europe. The progress of the CIS countries in expanding trade with and exports to the only practically accessible developed market of the European Union is very slow so far. The CIS exports to the EU are dominated by products of extracting industry, while the CIS imports from the EU are aid-dependent. This makes the CISu0096EU trade flows insufficiently sustainable. While trade policies on both sides are partially responsible for this situation, there are much bigger impediments to trade related to incomplete structural reforms, underdeveloped institutions in the CIS countries and combination of small size of CIS domestic markets and lack of regional cooperation in the CIS. In these conditions established business connections between the new EU members and the CIS countries become a factor in facilitating CISu0096EU trade expansion.