Remarks by Commissioner Mandelson at the launch of the CEFTA expansion negotiations

Remarks by Peter Mandelson, EU Trade Commissioner, at the launch of CEFTA expansion negotiations: "Launch of the renewed Central European Free Trade Agreement"

It is a great pleasure and a privilege for me to be here with you today, as you launch the renewed Central European Free Trade Agreement. Let me begin by joining Olli Rehn in thanking Romania and the Stability Pact for organising our meeting.

Trade is at the very heart of both the EU Stabilisation and Association process and the European Neighbourhood Policy. Trade liberalisation can, under the right conditions, make a huge contribution to economic development and, in turn, provide the foundations for political stability. That is why this agreement is a particularly welcome step forward in a region which has known recent tragedies.

Open markets are not in themselves enough to ensure the benefits of free trade. Countries and regions need to establish and maintain new sources of comparative advantage. They need to engage economically at every level -bilaterally with their main trading partners, regionally with their neighbours and globally in world markets.

I know that you turn to the European Union for deeper trade and economic integration. For each of you the EU is already by far your main bilateral trading partner and the autonomous trade preferences that we put in place in 2001 give you free access to our large and affluent market.

Our bilateral agreements have allowed the Western Balkan countries to attract high technology, services trade and investment from the EU, all of which are vitally important for the economic development of the region. And, of course, Bulgaria and Romania are already almost fully integrated in the EU.

Globally, all of the countries represented here today are either in the World Trade Organisation already, or in the process of negotiating accession. WTO membership is essential, because it lays down the bedrock of shared international trade rules and provides the basis for further, more ambitious openness to trade.

And what about regional integration, which is why we are here today?

Closer economic integration with the EU and the development of closer trade links within your region should be seen as mutually reinforcing objectives. They are not in contradiction. Regional integration is a natural objective between neighbours. It is also essential in strengthening the performance of your economies, and in preparing for the competitive impact of participating in the EU's single market. This is why the European Commission has always offered strong political and technical support for trade opening in this region. .

You have already achieved impressive results through the conclusion and implementation of more than 30 bilateral Free Trade Agreements. These FTAs have brought an increase in regional trade. Today, you are taking an important step forward, in agreeing to start negotiations to extend and improve the Central European Free Trade Agreement, and thereby replace the current network of FTAs with one economically efficient, integrated and modern agreement.

The potential benefits are huge. As one large, integrated market the region will attract more investment. In consolidating and making more transparent regional trade rules you will give a boost to businesses within the region. The regional free trade area will allow you to develop competitive advantages and will strengthen the export potential of your different economies.

All this will promote growth and jobs, helping to support the challenging reforms that lie ahead in economic and governance reform.

To be successful, this new CEFTA will have to be inclusive and ambitious. I hope that you will be courageous in addressing complex issues such as services liberalisation, regulatory convergence, opening of public markets and protection of intellectual property. You will also need mechanisms to allow you to resolve the disputes which may arise out of the increasing trade flows between you. This will be fundamental in building business confidence.

I hope also that you will be able to resist those voices calling for protectionism or isolation. Those seeking protection are always more vocal than those standing for openness. Yet history shows that protectionist policies are not the way forward. Protection for producers comes at a cost to consumers and hence to global domestic welfare. Problems of adjustment to the European or global economy cannot be solved by putting up barriers.

So I wish you a successful and rapid negotiation. The European Commission will stand by you, offering support and guidance if you require it. I shall follow the progress of the negotiations closely and hope to be back when you conclude them. The objective - a prosperous, stable and integrated South East Europe, able to compete in the wider European market and indeed moving towards the EU - is worth our best efforts.

| Arriba |

• Speech by EU Trade Commissioner Mandelson: Progressive liberalisation in a globalised world (15/5/2006)
• European Commissioners Mandelson and Rehn to launch South East Europe trade liberalisation talks  (5/4/2006)
• EU Trade Commissioner Peter Mandelson in Latin America, 27-31 March 2006 (27/3/2006)
• EU Trade Commissioner Peter Mandelson's address to the 5th EUROMED Trade Ministerial Conference (24/3/2006)
• Speech by EU Trade Commissioner Mandelson: "Sustainable Trade: observations on trade and protectionism" (21/3/2006)
• Speech by EU Commissioner Mandelson: EU Agriculture and the World Trade Talks (27/2/2006)