The EU recently admitted the Eastern European countries. How do you assess the impact of the EU\'s expansion? What are the costs and benefits of the expansion for the U.S. economy? Solution The accession of eight Central and Eastern European countries (CEECs) to the European Union in 2004 will bring some important bene- fits. The new members will gain from reduced bar- riers to trade and investment. By 2010, the move- ment of labor will also be freed. But accession to the EU is neither a necessary nor a sufficient con- dition for economic growth. The combined effects of market access and economic liberalization, not EU membership, optimize economic growth. Unfortunately, the incoming EU members had to choose between the common market on the one hand and economic liberty on the other. Instead of concluding free-trade agreements with the EU, the CEECs were cajoled into an increas- ingly centralized superstate, in which most of their comparative advantages will be legislated out of existence. As a result, economic growth in Central and Eastern Europe (CEE) will continue to be suboptimal. The loss of potential future eco- nomic growth will be only partly offset by the CEEC .