1. EXTENDING GOVERNANCE: THE EU’S ENLARGEMENT AND NEIGHBOURHOOD POLICIES Dimitar Bechev St Antony’s College, Oxford Visiting Associate Professor, Hitotsubashi University REGULATION CROSSING BORDERS 31 March 2010

2. QUESTIONS How does the EU extend rules, institutions and policies towards ‘third countries’? What are the political dynamics and limits of the Union’s ‘transformative power’?

3. NORMATIVE POWER Ian Manners (2002): “the ability to define what passes for ‘normal’ in a globalized world”. Norms vary: political (e.g. democratic governance, cooperation), economic (western European welfare state?), functional/regulatory (the Single Market, the acquis as a whole).

4. EASTERN ENLARGEMENT Google “enlargement” “most successful” “EU”: 2,150,000 results; Western Balkans – Croatia negotiating accession since 2005; the rest – antechamber; Turkey – negotiating accession. Regulatory convergence (the third Copenhagen Criterion 1993) – is key, though much attention is paid on political conditionality.

5. ACQUIS COMMUNAUTAIRE Added to that – political chapters, e.g. Judicial reform; Foreign, security and defence policy. 1. Free movement of goods 2. Freedom of movement for workers 3.Right of establishment and freedom to provide services 4. Free movement of capital 5. Public procurement 6. Company law 7. Intellectual property 8. Competition policy 9. Financial services 10. Agriculture and rural development 11. Food safety, vererinary and phytosanitary protection 12. Fisheries 13. Transport 14. Energy 15. Taxation 16. Economic and monetary policy 17. Statistics 18. Social policy and employment 19. Enterprise and industrial policy 20. Trans-European networks 21. Regional policy and coordination of structural instruments 22. Justice, freedom and security 23. Environment 25. Consumer and health protection 26. Customs union 27. Financial control

6. EUROPEAN NEIGHBOURHOOD POLICY ENP seeks to reproduce enlargement – similar goals, similar instruments (see handout); EU policies are generic – because of institutional inertia and hub-and-spoke structure of relations with peripheral countries and regions. Differentiation: Eastern dimension (Eastern Partnership) vs. Southern Dimension (Union for the Mediterranean); political incentives Economic incentives: “Deep free trade” and “stake in the Single Market” vs. membership vs. trade liberalization; Institutional incentives: participation in EU bodies – e.g. in executive agencies – for frontrunner countries: Ukraine, Moldova, Israel, Morocco;

7. ACCESS VS. CONVERGENCE Bechev and Nicolaidis, Journal of Common Market Studies, 2010.

8. MODES OF GOVERNANCE Conflict management: ESDP missions in Western Balkans, ENP area; Gatekeeping: access/convergence, esp. regarding the Single Market; Policy networks: external governance stricto sensu (cf. Lavenex), especially in areas where acquis is weak.

9. CAVEATS AND CONSTRAINTS How consistent and coherent are the EU demands to proximate countries? How significant is the reward relative to the costs? Sequencing: which parts of the acquis when? Is there sufficient institutional capacity to take onboard EU regulatory frameworks? Does the EU have the capabilities to monitor compliance and enforce rules?

10. WIDER EUROPE: A SNAPSHOP CountryBertelsmann Transformation Index/rank 2010 Freedom House score, political/ civil rights, category, 2009 Transparency International corruption perception index/rank, 2009 GDP per capita (PPP, USD) Percentage of EU27 average Croatia8.30/151/2, free4.1/6617,87654.67 Turkey7.54/203/3, partly free4.4/6112,33937.73 Macedonia7.53/213/3, partly free3.8/719,04727.67 Serbia7.39/242/2, free3.5/8310,54032.23 Montenegro7.35/253/2, free3.9/6910,83333.13 Albania7.17/303/3, partly free3.2/957,01921.46 Ukraine6.55/373/2, free2.2/1466,46119.76 Kosovo6.48/385/4, partly freen.a. Bosnia6.49/394/3, partly free3.0/997,49022.9 Georgia6.03/524/4, partly free4.1/664,74714.51 Moldova5.79/613/4, partly free3.3/892,7668.46 Armenia5.75/626/4, partly free2.7/1204,91615.17 Azerbaijan4.85/866/5, not free2.3/1439,35228.6 Belarus4.52/967/6, not free2.4/13912,48638.18

11. SECTORAL CASE STUDIES Energy Community - Set up by EU and Western Balkans in Oct 2005. Liberalization of energy sector based on EU directives adopted in 1996/2003/2009 – unbundling, third-party access; Electricity and gas. Policy dialogue on oil, social issues; - Reproduces EU institutions on a subregional level; -Depends on reform progress across policy areas, physical infrastructure, coherence of EU framework; -Implementation problems – e.g. in Macedonia; -Enlargement: Moldova (March 2010), potentially Ukraine.

12. SECTORAL CASE STUDIES Transport Community -Launched by the Slovene Presidency of the Council (2008); -Future treaty - harmonization with the acquis reciprocal access to transport services market; -acquis is particularly extensive: market access and social, technical, fiscal, safety and environmental requirements; -Political vs. economic logic.

13. CONCLUDING REMARKS Multilateral arrangements – early adoption of the acquis in core areas expected to yield economic and political benefits; Functional bridge between the Western Balkans (enlargement) and the western CIS (ENP/EaP) area; As enlargement is slowing down after Croatia and Iceland (2012?), regional cooperation might become more prominent instrument for regulatory convergence.