The accession process requires that candidates adopt the common body of EU law which governs foreign policy, specifically, movements of goods, persons, and capital, as well as transportation, telecommunications, and the environment. Accession represents a commitment for Central and Eastern European countries who urgently need to overcome political and economic barriers, and the legacy of decades of communist rule.

The  accession has created a unique opportunity for US companies, particularly those with expertise in IT, telecommunications, infrastructure, energy and environmental technologies.

The benefits of an Enlarged European Union

Drop in tariff rates to EU levels
Enlargement  benefits US exporters, because following accession the average tariff rates in Hungary  immediately dropped to EU levels  Tariff reductions made US products more competitive in accession country markets.

Reduction of other trade barriers

• No need to recertify goods destined for accession countries.
  
• No need to adapt products for small markets. US exporters  benefit as their product manufacturing cost decreases.
  
• Conform to a single standard and certification process for the entire region.
  
• Intellectual property rights, including patents on pharmaceutical products are enforced.
  
• Rigorous enforcement of competition policy with regard to pharmaceuticals.
  
• Cost of doing business in an enlarged EU  had fallen as US exporters consolidated sales organizations and simplified corporate structures.
  

Selling to EU government entities is easier
EU is a party to international agreements under the World Trade Organization (WTO). Therefore accession states must comply with various WTO agreements regarding civil aircraft, government procurement and information technology. This is particularly beneficial to US firms selling to government entities.

Opportunities in Specific Industries

Information Technology

• Computer hardware, software, computer services
  
• database design
  
• network integration
  
• e-commerce
  

Increasing demand for Information Technology products and services is due to the requirement that local companies must reach an equal technological level with the European Union in order to be competitive with EU firms. Also, accession government policies promote growth in domestic hi-tech industries in order to establish their countries as high-tech hubs to service the European continent.

Telecommunication
EU directives affect liberalization of the telecom sector, regulation and establishment of tariffs for voice, data and optical services and the digital signature and cable TV sectors.

The number of fixed-line telephone customers falls far below EU standards. There is great potential for US companies to help Central European countries adapt this sector to match EU standards.

Transportation and Infrastructure
There are significant opportunities in transportation and infrastructure since candidate countries must bring road, highway, railway, aviation and maritime systems into alignment with EU standards. There are upgrading requirements in the field of safety, environmental and noise abatement.

Energy
Power plants must be adapted to EU standards. Significant upgrades are be required in the domestic energy sectors, including upgrading the national electric grids and integrating into existing EU power grids. Central Europe must reduce waste and develop renewable energy resources, including solar, hydro, wind and biomass technology.

The Environment
Accession candidates must introduce new environmental policies to match those of the EU, which are much stricter. They need to obtain technologies to reduce air, water and industrial pollution and to improve waste management. This procedure will take years, allowing US firms to explore opportunities even after these countries join the EU.

Since the political and economic changes of 1989, Hungary has steadily developed into one of Central Europe’s most attractive business environments. It achieved political and economic stability while successfully transforming into a modern market economy. As a result of this stability, Hungary joined the Organization for Economic Cooperation and Development (OECD) in 1996, became a member of the North Atlantic Treaty Organization (NATO) in 1999, and  became a full member of the European Union in May, 2004.

According the U.S. Commercial Service, the “Best Prospects” for exports of goods and services from US companies to Hungary, which are also considered favorable sectors for investment, are as follows:

• Computers and peripheral equipment
• Pharmaceuticals and medicinal products
• Pollution control equipment and services
• Architectural/Construction/Engineering services
• Auto parts and supplies
• Travel and tourism
• Franchising
• Information technology security
• Measuring/scientific equipment
  Medical equipment and health care technology
• Agricultural equipment
• Cosmetics and toiletries
  

The best sector prospects in the area of investment are:

• Automotive industry
  
• General industrial and machine tool industry
  
• Information technology industry

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