INTRODUCTION

The European Union1 is undoubtedly the most successful regional trade agreement created in the post-war period. It is often cited as the inspiration for other regional trade experiments, I suspect usually by people at a loss for better openings for their speeches or articles. It has also attracted the adherence of neighbouring countries to the extent that its membership has grown from the original six countries in 1951 or 1957 (depending on the starting point chosen) to twenty-seven today and, in the process, has become the world's largest trading bloc. As such, it has been an attractive potential partner for countries seeking to intensify bilateral trading relations through preferential trade agreements.

This chapter examines the development of the EU's external trade policy since the end of the Cold War in 1989. One can view the various stages in the hierarchy of this trade policy as a series of concentric circles which starts with enlargement, the inclusion into the European Community itself and the full incorporation into its internal trade regime. The steps to full membership of the European Union have recently been preceded by a period of association, which confers limited free trade status (usually excluding agriculture) and which is accompanied by the financial and technical assistance to prepare countries for the institutional and legal demands of membership. This has also included demands for norm changes and the adoption of democratic structures. Association has not only been employed for candidate countries, but also for European countries that have opted not to apply for full membership. Although it is not explicitly stated, an eventual application for membership on their part would obviously be considered sympathetically. More recently, the EU has started using trade agreements with countries which it has no intention of admitting. This has been the case of its relation with former colonies and overseas territories which had been the beneficiaries of preferential trading for over thirty years but which, because of WTO rules, had to be converted to reciprocal free trade agreements, known as Partnership Agreements. Similarly, in an effort to stabilise the situation on its borders, the EU has started to construct a ring of free trade agreements, first among the Mediterranean countries and, later, it extended the strategy to cover neighbouring countries among the former states of the Soviet Union.