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Statement On The Pressure Exercised By Russia On Countries Of The Ea

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  • Statement On The Pressure Exercised By Russia On Countries Of The Ea

    23:17, September 11, 2013

    Stefan Fule

    European Commissioner for Enlargement and Neighbourhood Policy

    Chairman, Honourable Members,

    The Eastern Partnership Summit in Vilnius is fast approaching. It
    promises to mark a momentous step forward in our political association
    and economic integration with several of our eastern European
    neighbours. Clearly - and wrongly - this is seen in some quarters as
    a threat. As a result, we have seen enormous pressure being brought
    to bear upon some of our partners.

    The European Union has always been perfectly clear about its policy
    towards our Eastern neighbours. Our common interests dictate that we
    should work with our eastern neighbours to build a zone of prosperity
    and stability in our continent. Already the existing Partnership and
    Cooperation Agreements, signed in 1994, foresaw the development of
    a free trade area. Feasibility studies launched in 2004 led to the
    development of "deep and comprehensive free trade areas" (DCFTAs)
    as an integral part of the "new enhanced agreements" - subsequently
    known as Association Agreements (AA) - proposed in 2006. The first
    DCFTA negotiations started with Ukraine in 2008, as soon as it had
    become a World Trade Organization (WTO) member. The Commission's
    Communication of 2008 then laid the basis for the offer extended to
    our Eastern Partners at the Prague Summit establishing the Eastern
    Partnership in 2009 and confirming our joint objective of political
    association and economic integration underpinned by AA/DCFTAs. From the
    beginning, the European Parliament has strongly supported this approach
    of transforming this part of Europe both politically and trade-wise.

    It is true that the Customs Union membership is not compatible with the
    DCFTAs which we have negotiated with Ukraine, the Republic of Moldova,
    Georgia, and Armenia. This is not because of ideological differences;
    this is not about a clash of economic blocs, or a zero-sum game. This
    is due to legal impossibilities: for instance, you cannot at the same
    time lower your customs tariffs as per the DCFTA and increase them
    as a result of the Customs Union membership. The new generation of
    Association Agreements will bring enormous transformative benefits
    through legal approximation, regulatory convergence, and market
    liberalisation. Independent studies indicate that a DCFTA will bring
    substantial benefits. Exports to the EU could double over time,
    leading to increase in GDP of up to approximately 12%. But in order
    to implement these, our partners must enjoy full sovereignty over
    their own trade policies, which members of the Customs Union will not.

    It may certainly be possible for members of the Eastern Partnership
    to increase their cooperation with the Customs Union, perhaps
    as observers; and participation in a DCFTA is of course fully
    compatible with our partners' existing free trade agreements with
    other Commonwealth of Independent States (CIS) states.

    Let me be clear: the development of the Eurasian Economic Union project
    must respect our partners' sovereign decisions. Any threats from Russia
    linked to the possible signing of agreements with the European Union
    are unacceptable. This applies to all forms of pressure, including:

    ~@ the possible misuse of energy pricing;

    ~@ artificial trade obstacles such as import bans of dubious WTO
    compatibility and cumbersome customs procedures;

    ~@ military cooperation and security guarantees: and

    ~@ the instrumentalisation of protracted conflicts.

    This is not how international relations should function on our
    continent in the twenty-first century. Such actions clearly breach
    the principles to which all European states have subscribed. In
    the Helsinki Principles of the OSCE we have committed to respect
    each country's "right freely to define and conduct as it wishes its
    relations with other States in accordance with international law".

    The European Union will support and stand by those who are subject
    to undue pressures.

    Let me emphasise that AA/DCFTAs are not conceived at Russia's expense.

    On the contrary, Russia will also benefit greatly from the integration
    of the Eastern Partnership countries into the wider European
    economy. Our vision is that these agreements should contribute in
    the long term to the eventual creation of a common economic space
    from Lisbon to Vladivostok, based on WTO rules.

    So we encourage our partners to deepen their ties with Russia,
    as we do ourselves, but in a way which is compatible with AA/DCFTA
    obligations. The European Union is ready to work with its neighbours
    to find ways to promote greater regulatory convergence between the
    EU and members of the Customs Union. The last thing we want to see
    is a protectionist wall cutting our continent in two. In today's
    ever-more-competitive global economy, we cannot afford to waste our
    efforts on a regional geopolitical rivalry.

    Closing Remarks

    Chairman, Honourable Members,

    We need to do a better job of explaining to Russia why it also stands
    to benefit from the creation of DCFTAs between the European Union
    and its traditional economic partners. The trade-creation effects
    will undoubtedly be more important than the trade-diversion effects,
    contrary to what some of our Russian friends fear. We will continue
    to raise this issue in our bilateral dialogue with Russia.

    I understand that Russia sees the extension of European Union standards
    and norms as a potentially problematic issue because those of the
    Customs Union are currently not always identical with them.

    However, we are already now actively cooperating with Russia on
    the alignment of many norms and standards. This is a key element of
    the European Union-Russia Partnership for Modernisation. And these
    standards are also increasingly adopted by the Customs Union. Let me
    stress that European Union norms are often adopted internationally,
    and are of course fully compatible or identical with WTO rules. So
    the European Union is actually helping all our partners including
    Russia to modernise and open up to globalisation.

    Likewise, the New Agreement we have been negotiating to replace
    the European Union-Russia Partnership and Cooperation Agreement
    should include provisions for greater convergence of the regulatory
    framework between the European Union and Russia and thereby help to
    generate stability and predictability for both Russian and European
    Union companies.

    When we set out to build the Eastern Partnership at Prague in 2009,
    there was no substantial talk of the Eurasian Union project. It is
    the Russian decision to build the Customs Union and the Eurasian
    Union that created a situation where our European partners are now
    confronted with a choice between two projects for regional economic
    integration. It is inconceivable that our partners should become
    victims of their incompatibility. It is inconceivable that through
    a decision, made freely, our partners should be punished and their
    trading relationship with customs union members threatened to be
    placed under far worse conditions than our own arrangements.

    We stand by on our side to do all we can to avoid this and work with
    our neighbours to find ways of maximising the compatibility between
    the EU and Eurasian structures in a way that can facilitate trade
    and economic integration.

    Thank you.