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Myths and truths about Association Agreement: Customs Union


https://www.ipn.md/en/myths-and-truths-about-association-agreement-customs-union-7978_1013966.html

The Association Agreement will lead to Moldova’s loss of sovereignty”, “The Association Agreement will further enflame Russia-Moldova relations”, “Consumer prices will increase as a result of the Deep and Comprehensive Free Trade Area”. These are only some of the most spread hypotheses about the Association Agreement with the European Union. Are they true theories or just myths? IPN aimed to find out the answer from a number of independent experts and officials working in the addressed areas.
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The DCFTA with the EU is not better for Moldova than participation in the Customs Union

Director of the Center for Political Analysis and Consultancy “Politicon”Anatol Taranu said there are a multitude of data refuting this assertion. First of all, the trade with the European Union has exceeded the trade with the CIS states and the EU market is much larger than that of the Customs Union. The most important aspect is yet the fact that the EU market is not politically influenced.

“There is pure economy there. If you are competitive and able to penetrate this market, you will only reap the harvest. Such an economic approach for Moldova means a way to economic modernization. On the other hand, Russia’s market is permanently obstructed by different political conditions. This impinges on Moldova’s sovereignty,” said Anatol Taranu.

The director of “Politicon” also said that the lack of technology, the very low quality requirements in the Customs Union and everything that refers to the competitiveness of products cause the low technological level of Moldova to remain unchanged. The EU market stimulates modernization, while the Customs Union’s market strengthens stagnation. “This myth is a really anti-productive one for Moldova. In fact, it is against the vital interests of our country,” stated the political analyst.

On its website, the Delegation of the European Union to Moldova says this is not true, for two main reasons. Firstly, the DCFTA is a free trade area: this means that the EU and Moldova trade with each other more easily (by removing tariffs and aligning norms and standards). In contrast to a Customs Union, a free trade area does not align import and export duties of the partners and does not oblige them to have the same trade policy. In consequence, in a free trade area Moldova and the EU will maintain their sovereign choices over their policies. In a customs union, such sovereignty is handed over to a supranational institution which implements the customs union agreement. An individual member of the customs union can no longer freely decide on its trade relations with third countries.
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Alina Marin, IPN