Hello , we are students from Erasmus University Rotterdam. We would like to discuss the following topic: The European Union (EU) was established after the 2nd World War. With the Treaty of Rome 1957 the EU was created and initially six European countries joined the EU: Belgium, France, Germany, the Netherlands, Italy and Luxemburg. Since May 2004, ten new countries have been added to the current European Union: the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. In order to be a part of the EU, these countries needed to fulfill certain criteria which were based on three main points: 1. Be a stable democracy, respecting human rights, the law, and the protection of minorities; 2. Must have a functioning market economy; 3. Adopt the common rules, standards and policies that make up the body of EU law. Our paper shall mainly focus on the “economy” aspect of the EU, and, more specifically, how this new enlargement will influence the trading relations between the EU, with its new members, and the USA. The upcoming challenges facing EU-USA trade relations will be complicated to resolve, and will definitely have an impact on the economies on both continents. First of all, after enlargement, average tariff rates in all the applicant countries dropped to EU levels, an average rate of 4 percent, which is, on balance, less than the average tariffs imposed before on US products by the new member countries. Accession will also reduce other non-tariff barriers. Recertification of products in different countries was a serious problem for some US exporters which after enlargement disappears as all countries accept common EU quality standards. Also enforcement of intellectual property rights and competition policy will greatly improve market access for US pharmaceuticals. Other industries which are be affected most are steel and agriculture. On a lesser scale, US companies, operating within the EU will be able to profit from the new expansion. In some cases they will no longer need individual subsidiaries which had to deal with adoption to standards and rules of individual countries and will be able to concentrate on a larger scale, expanding their businesses to the new EU states. Finally, one of the final aspects of the new EU enlargement will be its impact on the Euro/Dollar rate, and how the eventual adoption of the euro in the new member states will influence it. In general, it is believed the adoption of the euro by the accession countries is likely to result in a modest increase in transaction demand for the euro, a larger increase in asset demand because of a shift away from the dollar toward the issuance of euro-denominated debt, and potentially a positive shift in financial market perceptions of the euro as the Eurozone becomes more dynamic economically. Therefore these are in brief some of the points our paper will look at in detail, while emphasizing on US-EU trade relations and their strengths and weaknesses, and future possibilities. Therefore these are in brief some of the points our paper will look at in detail, while emphasizing on US-EU trade relations and their strengths and weaknesses, and future possibilities. Please write us your comments Message was edited by: genich00