On May 19th, 2017 a scientific-practical round table “Prospects and challenges of the development of economic cooperation between Moldova and the Eurasian Economic Union (EAEU)” took place at the Higher School of Economics in Moscow. Co-organizers of the round table were the Russian International Affairs Council and the Center for Eurasian Studies.
The event was attended by representatives of the Eurasian Economic Commission, the Eurasian Development Bank, the Russian Academy of Sciences, Moscow’s leading universities, the Ministry of Economic Federation, Russian state-owned corporations, embassies of sevaral EU and the EAEU countries.
On April 3rd, 2017 the Chairman of the Board of the Eurasian Economic Commission Tigran Sargsyan and the President of the Republic of Moldova Igor Dodon signed in Chisinau a Memorandum of Cooperation and Understanding. At the following summit of the Supreme Eurasian Economic Council in Bishkek on April 14th, 2017 Heads of the Member States of the EAEU welcomed the intention of the Republic of Moldova to obtain observer status at the EAEU and instructed the Eurasian Economic Commission to develop and submit to the next session of the Supreme Eurasian Economic Council a position paper on the status of an observer state. At the same time, from September 1st, 2016 Moldova is an associate member of the European Union .
In this regard representatives of hink tanks, national and supranational agencies, of the international scientific and expert community discussed the following issues: the current status and potential deepening of trade and economic cooperation between Moldova and the EAEU; the essence of the provisions of the Memorandum of Cooperation and Understanding between Moldova and the EAEU, as well as of the “observer state” status; potential forms of cooperation or integration between Moldova and the EAEU (FTA, FTA +, a trade and economic partnership, joining the EAEU); the domestic political context both in Moldova and in Europe; prospects for deepening trade and economic cooperation between Moldova and the EAEU within the concept of an “EU -EAEU common economic space”.
The round table was opened by Yekaterina Chimiris, PhD in Politics, RIAC program manager. She told the participants about the just-concluded RIAC – EEC School “International cooperation EAEU” for young experts.
At the beginning of the discussion a consultant of the department for analytical support at the Department of protocol and organizational support of the Eurasian Economic Commission Stanislav Krupin conducted a comparative analysis of the trade and economic relations of the Republic of Moldova with the EU and the EAEU.
During his speech, member of the board, chief economist of the Eurasian Development Bank, PhD in Economics, Yaroslav Lissovolik shared his expert opinion on the correct approach to the “integration of integrations”.
Firstly, strengthening of trade and economic cooperation between Moldova and the EAEU should not be perceived as a “zero sum game”, but rather as conceived within the wider concept of a common economic space from Lisbon to Vladivostok.
Secondly, as long as Brussels does not recognize the international legal personality of the Eurasian Economic Union, the Eurasian side should not chase after a “grand bargain” (Vinokurov) between the European and Eurasian commissions. Rather, a potentially successful experience of cooperation of the smaller Eastern European countries, such as Serbia, Georgia and Moldova, both with the EU and the EAEU, may pave the way for an agreement between the two unions in the future.
Third, Yaroslav Lissovolik proposed the creation of a trilateral commission consisting of representatives from Moldova, the EAEU and the EU for conducting consultations and to find a mutually beneficial format of cooperation.
International lawyer and research fellow at the Center for Eurasian Studies Yuri Luchin briefly summed up the legal framework for economic cooperation between Moldova and the EAEU.
Thus, the Association Agreement between the European Union and the Republic of Moldova (2014) does not exclude the possibility of creating a free trade zone between Moldova and third parties. However, any such initiative must be approved by the European Union (article 157; nr. 2, nr. 3 of article 437; nr. 4 of article 438 of the Agreement).
At the same time, the Treaty on the Eurasian Economic Union (2014) provides for the possibility of establishing free trade zones between the EAEU and third parties (article 7 of the Treaty), and does not prevent the Member States of the Union to sign other international agreements, as long as they do not contradict the purposes and principles of the Treaty (article 114 of the Treaty).
The next speaker was Andrei Devyatkov, PhD in History, senior fellow at the Center for Post-Soviet Studies at the Institute of Economics, associate professor, Department of Regional Problems of World Politics at the Lomonosov Moscow State University. The expert announced the following theses:
The FTA between Moldova and the EU is “deep and comprehensive” in character, which implies that Moldova takes over the EU’s normative regulation in many areas of tariff regulation, sanitary and phytosanitary measures, energy, banking regulation, etc., despite not being a member of the European Common Market,
On the other hand, the all the EAEU states are part of the CIS free trade area with Moldova, which creates favorable conditions for trade and economic relations. Therefore, in terms of “integration of integrations” it is advisable to think about the combination of two free trade zones – the EU DCFTA and the CIS FTA. This was recently the topic of negotiations between vice-premiers Rogozin (Russia) and Kalmyk (Molfova) in 2016 as part of the bilateral commission on trade and economic cooperation.
Thus the most realistic scenario looks as follows: the most favored nation treatment, which Russia introduced against Moldova in 2014, will continue (which is an exemption from the CIS FTA), yet phytosanitary and veterinary restrictions will gradually be removed. The prerequisites for the removal of restrictions would be both the solution of purely technical issues (improvement of the phytosanitary and veterinary control system in Moldova, as well as the improvement of Moldovan product quality, close cooperation in customs), as well as favourable political factors.
In the political sphere the results of the parliamentary elections scheduled for autumn 2018 in Moldova will play a crucial rule. As a result the Socialist Party could increase its influence in Moldovan politics and redress some of the most deteriorated elements of Russo-Moldovan relations.
For Moldova in relation to the EAEU the task at this point is , the official delegation of which can be formed only by the parliament and the government, to make full use of the observer status at the EAEU. it is advisable to exchange information on key competencies EAEC when positive developments – in the field of customs tariff and non-tariff regulation. It is important to note, that the official Moldovan delegation to the EEC can be formed only by the parliament and government of Moldova, which, in opposite the president, at the moment is stongly pro-Western and anti-Russian.
The scientific discussion was also attended by Elena Kuzmina, PhD in Politics, director, Center for Post-Soviet Studies, IMEMO and by Pavel Kandel, PhD in History, research fellow, Institute of Europe, Russian Academy of Sciences.
The work of the round table was concluded by the director of the Center for Eurasian Studies and IIASA research assistant Jurij Kofner.
Firstly, according to a study published in 2016 by the German IFO-Institute (Munich), Moldova would significantly benefit from the combination of the EU and CIS free trade zones. In the case of such a scenario, real GDP per capita of Moldovan citizens would grow by 6.3% (98 euros per person), revenues would go up by 6.9%, while inflation would fall by 2.8%. Garment manufacturing, agriculture and retail trade would be among the sectors of the Moldovan economy that would benefit the must from such a scenario.
Secondly, it is technically possible to match the EU and CIS free trade zones by implementing and monitoring “rules of origin”, which allow to prevent the re-export of European goods to the Eurasian market by illigaly marking them as goods from Moldova that would be exempt from customs duties in the EAEU. The “rules of origin” institute is successfully being used worldwide.
Thirdly, Jurij Kofner supported the idea by Yaroslav Lisovolik tp create a trilateral EAEU – Moldova – EU commission and additionaly proposed the creation of a prototype of such a negotiations platform in a scientific and expert format baed at IIASA, which conducts the international research project “Prospects and challenges of wider a European and Eurasian economic space”.