The European Rim Countries - Challenges and Opportunities for EU Competitiveness

Introduction



Reflecting the diversity of countries in its neighbourhood, the European Union (EU) has
established different cooperation processes, institutional arrangements and forums for its
discussions with these countries. Each form of cooperation is characterized by its own
dynamics, institutional set-up and instruments, procedures, long-term objectives and
problems. The various forms of cooperation between the EU and its neighbouring
countries also reflect the importance of those countries for the competitiveness of the EU
and its Member States. The form of cooperation is affected by the size and structure of the
economy of the particular country, its geographical location, geopolitical situation and its
level of economic development, by bilateral trade and investment flows, its labour market
situation and the migration flows between the country concerned and the EU. This study
analyses these differences, the impacts of each form of cooperation, and the implications
for the competitiveness of these countries and of the EU.



Given the special connotation of the term ‘European Neighbourhood’ in the EU, this study
instead uses the term ‘European Rim’ (or just ‘Rim’) for the countries covered. Following a
mapping of the economic situation and the competitiveness of the Rim countries, the study
proceeds to a brief analysis of the following aspects of the Rim’s competitiveness:

The economic impacts of existing agreements between EU Member States and Rim
countries, including in terms of FDI and trade flows. A simulation of various scenarios
covering free trade in goods between the EU and some of its neighbours is attempted.

Where possible, the effects of bilateral agreements on the growth and productivity of
small and medium-sized enterprises (SMEs) in the Rim countries are investigated.

The economic impact and the impact on competitiveness of migration and remittances
flows between Rim countries and EU Member States are investigated, as is the effect
these have on the labour market.

Conclusions are drawn and policy recommendations made on the basis of the analysis;
these cover the challenges and opportunities for the competitiveness of EU enterprises
and sectors in the Rim countries.