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Economic Benefits of Enlargement

The main economic benefits of enlargement are as follows:

• EU enlargement has brought down barriers to trade and business. UK companies have benefited from access to the largest single market for trade and investment in the world.
• The economic reforms adopted by the new members increase their purchasing power and thus the demand for EU goods and services, opening new markets for UK business.
• The international competitiveness of UK companies is increased – they will benefit from cheaper inputs, a larger and more diverse labour market, additional opportunities for technology transfers and greater economies of scale.
• The further liberalisation of trade in goods and services in the New Member States will bring about shifts in production in certain sectors that will enable the UK to focus on areas where we have a comparative advantage, such as financial services, increasing economic efficiency.
• UK consumers benefit from cheaper and a wider choice of imports, enabling them to spend more on other goods and services.
• UK firms do not compete on labour costs alone, but seek to maximise productivity and higher value-added activities.
• New Member States alignment with EU Regulations has meant that the British businesses that were already operating in the new Member States have benefited from a less risky and more familiar operating environment. And UK firms have benefited from reduced compliance costs, eg with regard to import/export regulations.
• The creation of a wider single market has provided businesses (particularly the service and trade sectors) with more export opportunities – with the 2004 accession adding 75 million consumers to the EU’s internal market.