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Book Reviews
In its detailed coverage of the statistics of foreign trade between the EU and the ten central and east European (CEEC) economies thought to be first in line for EU membership, Alan Smith’s short book is unsurpassed. The work is densely packed with data giving a complete picture of EU–CEEC trade, much of it at the 3-digit SITC level, for the period 1989–96. The author’s thorough interrogation of those data yields an unrivalled mid-1990s snapshot of trade relations between east and west. But be warned, this is the kind of book – with its 70 or so tables and its dense text – that needs to be read with a very clear head!
The broad picture that emerges will surprise few readers. First, CEECs achieved a remarkable early 1990s switch, from a defunct CMEA–Moscow trade orbit to return to a German-centred trade pattern more characteristic of the inter-war period. Second, CEEC tends to sell to the EU at the low unit value end of the market (cheap if not cheerful). Third, there is little of the intra-industry trade so characteristic of advanced economies. Fourth, some CEEC economies (Hungary, Slovenia maybe the Czech Republic too) do much better than others in terms of export quality and emerge as the countries likely to be able to compete in the wider EU market. These are the countries moving in a sprightly manner up the ‘skills ladder’, whose exports already have desirable features and are not dependent just on low prices.
The reader who wants to know the details of Czech, Polish, Hungarian or other CEECs mid-1990s trade specialisms will find the answers in this book, and there is no doubt that the author has done an excellent job in laying bare the facts. The accompanying discussion however, with its many compelling questions, is less full than it might be. The author suggests, for example, that the CEEC-10 fall, more or less neatly, into three country groups based on ability to withstand EU competition (part of the Copenhagen entry criteria), and by extension into those countries closer to and further from EU entry. Smith believes that the former will benefit from a wide range of ‘first-mover advantages’ and this will make life more difficult for the excluded, the ‘outs’. He may well be right, but what follows? Should the CEEC-10 join in one wave? Should it be sooner or later? And, given the sanctity of the acquis, is it even conceivable that the EU could accommodate a single wave? How much Brussels-based flexibility would be needed to devise a different, certainly fresher and perhaps more appealing approach to enlargement?
An air of pessimism permeates the text as Smith reflects on the almost inevitable concentration of production in a larger, freer EU market, where the disadvantaged sink deeper into a quagmire of despair and economic decline. But does it really have to be so? In the poor Mezzogiorno region of Italy per capita incomes rose from 50 per cent of the EU average in 1970 to 70 per cent in 1991. Is there perhaps hope yet for non-Hungarian, non-Slovenian and non-Czech CEECs?
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