OP:11 The Association Process: Making it Work, Central Europe and the European Community
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Publication Date: November 1992

Abstract: Following the political upheaval in Eastern and Central Europe in the late 1980's and the collapse of Russian demand, and with it of Eastern Europe bloc trade, the countries of Central and Eastern (CEECs) looked towards the European Community for support. In particular, they sought support for their programmes of economic transformation through the development of trade links. It was also hoped that the \Community would be able to provide technical and financial assistance, as well as an economic and political model towards which they might progress. in the longer term, the goal was the security of an integrated Europe via full membership of the Community for CEECs.

In 1990, Czechoslovakia, Hungary and Poland signed treaties with the Community on trade and commercial and economic cooperation. These treaties were the forerunner to a set of Association Agreements between these countries and the EC, negotiated during 1991 and signed in December of that year. the trade part of the Agreements was to come into force on 1 march 1992, with the full agreements coming into force upon ratification by the 15 national parliaments.

The Agreements (also called Europe Agreements') aimed to create a new climate for economic relations between the EC and the CEECs, and as the preamble to the Agreements said, 'in particular for the development of trade and investment, instruments which are indispensable for economic restructuring and technological modernization'. It was immediately apparent, however, that there would be problems and conflicts in implementing the agreements. As L Alan Winters says in his contribution to this report: 'The agreements are disappointing in the degree of support and encouragement they guarantee to CHP ... Indeed, they sometimes appear to be designed as much to minimize the adjustment that the revolutions of 1989 cause in the EC than to maximize the benefits that accrue to CHP'. Furthermore, after the signing of the Agreements, it was necessary to continue and extend contracts so that the Association process could not begin to compensate for inadequacies in the Agreements, leading to a consensus for their ratification in the national parliaments of the contracting parties.

In order to promote such dialogue, CEPR, jointly with SCH Consultants and the Solvay Business School, organized a seminar on the Agreements in Brussels on 27 February 1992. the seminar was intended to provide the first in-depth outside discussion of the Agreement and to raise their profile by attracting media coverage, since they had previously drawn little attention from this direction. financial support for the meeting was provided by the German Marshall fund of the United States and Lyonnaise des Eaux-Dumez.

The meeting succeeded in bringing together many of the key negotiators in the process, including Pablo Benavides, principal negotiator for the EC, and dealing with the Association process within the European Commission. In addition to presentations by Commission officials and representatives of the CEECs, short papers were presented by a number of academic experts in the field. The private sector was also represented and provided valuable input into the discussions. The key objective of raising attention in the media was certainly achieved. A number of journalists from major European and American newspapers were in attendance, and both the Wall Street Journal and the Financial Times provided substantial coverage immediately after the seminar.

The individual presentations and papers are summarized in this publication, and the full text of Alan Winters's briefing note is also included. It is our hope that, by making the discussions from the Brussels meeting available to an even wider audience, further dialogue will be stimulated on the Association process and attention drawn to the opportunities and problems that it offers. Professor Winters's paper, the first 'public' assessment of the Agreements (now revised for this publication), starkly lays out the dangers inherent in not honouring the spirit of the process: '1991 offered the EC the chance to make a major and imaginative contribution to the emergence of the transitional economies from their years of economic twilight ... [the EC had, perhaps, the greatest responsibilities for ensuring a successful transition] ... these have been recognized in the details and formality of the Europe Agreements , but not, unfortunately, in their content.' Yet much will depend on how they are implemented and on whether the Community can go beyond them to take a wider, deeper perspective on the integration of the CEECs into the economy and polity of the EC. We must hope for rapid progress in this direction, to which we believe this seminar has already contributed.

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