The EU and its neighbours

In addition to the candidate countries, the Union keeps its closest relations with four other neighbours, Iceland, Liechtenstein, Norway and Switzerland. All are members of the European Free Trade Association (EFTA), and have so far decided against EU membership. The four have aligned themselves with large parts of the EU’s single market legislation, and follow the EU in other policy areas. All except Switzerland participate along with the EU in the European Economic Area (EEA). A coherent neighbourhood policy The European Union is moving to consolidate relations with neighbouring countries to the east and south. Although not candidates to join the EU, Russia, Ukraine, Moldova and the republics of the Caucasus and central Asia are building individual relationships with the Union, based on partnership and cooperation agreements covering trade and other economic sectors, plus joint action in many areas of common interest. The agreement with Russia goes further than the others, focusing on economic issues, cooperation on research and education, as well as internal and external security. The EU seeks to update the relationship via a new framework agreement to include, inter alia, closer cooperation on energy. The aim with Ukraine is to move towards negotiations for a comprehensive free-trade agreement. With it southern partners, the EU’s aim has been to create a vast free-trade area to cover the EU, the Arab States with a Mediterranean seaboard and Israel. The individual association agreements between these countries and the EU are one element in the relationship, but they are currently being extended to cover other areas, such as trade in services and investments. To make sure that its eastern enlargements would no produce new dividing lines between the Union and its direct neighbours, the Union created its European neighbourhood policy (ENP) in 2004. This covers all the Mediterranean and east European countries plus the Caucasus, but not Russia. The ENP aims to bring about privileged economic and political relationships between the Union and each neighbouring country. Assistance for the partner countries will total €12 billion for the period 2007-2013, a rise of 32% over previous levels. Candidates and applicants Three countries are currently candidates for membership: Croatia, Turkey and the former Yugoslav Republic of Macedonia. Once negotiations are completed, the entry of each new member has to be approved by every EU country and by the European Parliament. Besides the three candidates, four countries in the western Balkans – Albania, Bosnia and Herzegovina, Montenegro and Serbia – are potential candidates for EU membership. The EU already allows all the western Balkan countries free access to its market for most exports and supports their domestic reform programmes. Regional groups Besides its bilateral ties, the EU is intensifying relations with international organizations (including the UN, NATO and the Council of Europe) and regional groupings around the world. This enables the EU to promote trade and investment flows with the regions concerned, particularly in Latin America and Asia. With its Asian partners, the EU has moved away from a policy of trade and aid to a more balanced relationship, reflecting their growing production and trading capacities. The strongest bonds Links with the United States are at the heart of the EU’s external relations. In addition to the huge transatlantic trade and investment flows, both sides share common values and, in instances, common interests. The USA has supported European integration since the outset. Contacts and dialogue are permanent features of the relationship – between business groups, trade unions, and environmental organizations, members of the European Parliament ad the US Congress and many others. The way the EU and the US have solved bilateral problems has served as a model for the Unions’ relations with other counties like Japan and Canada.