Economic Opening up of Russia: Establishment of New EU-RF Trade Relations in View of EU Eastern Enlargement

The EU's economic co-operation and political dialogue with Russia take place in many spheres touching the Kaliningrad issue, WTO membership, a war against terrorism, energy dialogue, and the consequences of the EU Eastern Enlargement that took place in May 2004. Undoubtedly, the European Union and the Russian Federation have also an important trade relationship. The interest of both parties in maintaining and strengthening this cooperation is even more important because of the EU Enlargement as they are now direct neighbours. The aim of the research was to look into the question how the EU Enlargement would influence Russia's opening up as well as its trade relations with the EU-25 with special focus on EU new members from Central and Eastern Europe. The paper has complex contents and present the subject in broad perspective. First chapter gives the theoretical base (theory of trade creation and diversion) on which analysis on current developments were made. The second describes the economic situation in Russia and its opening-up for trade. The third chapter gives detailed background of EU-Russian bilateral economic relations supported by statistical data. Furthermore, the existing trade regime and current changes in EU - Russia trade regime were described and analyzed. The fourth chapter describes thoroughly the process of the European integration generally, what it means for the new members and nonmembers in order to show the complexity of the EU Eastern Enlargement. The possible consequences of the EU Enlargement on EU-Russia and CEE countries - Russia trade relations are presented further. Then, in the end of the paper hypothesis is discussed that the establishing a Common European Economic Space (CEES) between the EU and Russia is a condition for overcoming any negative effects of Enlargement for both sides. By studying this subject it was hoped to shed some new light on the EU-Russia relations, presented fresh approaches and contribute some new results which in turn will call for some reassessment of what has already been done in the EU-Russia relations. Research was based on government and diplomatic documents, papers statistical data, solid expertise and broad cross-section of economists' opinion and other specialized publications or field interviews found on English, Polish and Russian web sites, in books and newspapers.