EU AND CENTRAL-EUROPE - AND NORWAY ABSENC E

The expansion of EU will entail major consequences for the integration process and for the Central European countries involved. It seems hig hly likely that it will trigger reforms of both the political mechanis ms and the principles for EU financial support. The trade relations be tween the applicants and the Union will probably develop according to a pattern observed in earlier expansions: initial deficit in new membe rs' trade balance, but increasing investments. The consequences for No rway may prove serious, since Norwegian and Central European commoditi es compete on the European market. A possible scenario is that of the new members pressing for import restrictions on Norwegian goods in ord er to gain a larger market share and higher income for themselves. Thi s may well be in the interest of the EU, and thus the Agreement on the European Economic Space may be weakened. How Norway is to cope with t his development is addressed, and greater emphasis on developing trade is recommended. Compared with the other Nordic countries, Norwegian t rade figures are low. Although this may be due to Norway's industrial structure, a contributing factor is the striking disparity in research efforts on the economic and political developments in Central Europe conducted in Sweden and Denmark, implying that industry in those count ries has a reservoir of know-how lacking in Norway.