OP-ED: Russia’s ‘roadmap’ and how this can frustrate Association Agreement with EU

Op-Ed
	In any circumstances, the Moldovan authorities should reject proposals for implementing the standardization, metrology and other systems of the CIS/Russia in parallel with the European ones. Such a scenario violates a series of commitments related to the DCFTA made by Moldova and goes against the logic of economic integration into the EU...
Dionis Cenuşa

The content of the proposals included in Russia’s ‘roadmap’ for restoring the commercial relations with Moldova was elucidated by the press. If the points correspond to reality, we can ascertain the beginning of a Russian offensive aimed at reviewing segments of the European agenda of Moldova. It should be noted that Russia chooses to do this in a difficult moment for the government of Moldova, which has a precarious public legitimacy and witnesses high-level corruption scandals and massive association with the bank frauds.

The document suggested by the Russian side includes 14 proposals, many of which, according to unofficial sources, were already rejected by the Moldovan authorities. The Ministry of Economy hurried to ensure that the document “does not envision the review of other agreements signed by the Republic of Moldova with the EU, the CIS and other international or regional organizations”, in a press release issued in the evening of July 14.

Many of the actions included in the ‘roadmap’ are fully disconnected from the Moldovan-Russian commercial framework, being related rather to (geo)political objectives. This shows that Russia’s intention is not to lift the restrictions imposed on the Moldovan products, in breach of the international agreements in force, with the aim of penalizing Moldova for signing the Association Agreement with the EU.

The subjects included in the ‘roadmap’ are very diverse by weight and irrelevance for the external trade. Thus, Russia suggests solving the problem of historical debts for natural gas and insists on extending the contract for the supply of electric power with the Cuchurgan power plant after this expires in 2017. It also wants assurances from the Moldovan side that this will permanently take part in the activities of the Commonwealth of Independent States (CIS) and will implement the decisions adopted by the CIS institutions. Moreover, Moscow proposed enlarging the composition of the Moldovan-Russian intergovernmental commission by including more representatives of the Transnistrian region and of Gagauzia. Examined altogether, the 14 points contain major threats to the political and economic sovereignty (in particular the sovereignty of the commercial policies) of Moldova. Also, particular measures go against the spirit of the provisions of the Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU.

‘Roadmap’ for restraining DCFTA?

Particular actions of those proposed refer to the DCFTA and show that Russia does not give up thwarting Chisinau in its attempts to fulfill the commitments to the EU.  

By this ‘roadmap’, Russia explores the possibility of maintaining the CIS system of standards and technical regulations inspired by the Russian legislation, in parallel with the European one that Moldova is introducing now. This refers to the non-tariff barriers, namely standardization, metrology and certification, and also to the veterinary sector associated with the sanitary and phytosanitary policies.

Thus, the Russians’ offer provides that Moldova should continue to implement the CIS agreements in the mentioned areas (metrology, standardization, veterinary, etc.). This means that the Russian norms and standards, which are different from or run counter to the European ones, should remain unchanged or reanimated even if, for example, over 1,000 GOST standards have been already withdrawn until 2014 (currently, about 50-60% of the over 27,000 national standards are GOST standards). It’s clear that the Russian side wants to keep its commercial and, respectively, geopolitical presence, protecting the distinctive characteristics of its immutable commercial policies (for example, GOSTs).

During at least two years, Moldova has been involved in a broad exercise of adjustment, modernization and integration of its national standardization, metrology, certification and sanitary systems to the European norms. This process involves activities to strengthen the institutions, train public servants and renew the lab infrastructure. The money for the purpose comes from the EU and other development partners. The stopping, annulment or modification of these actions by attempting to reintroduce or maintain by force the Russian standards and technical regulations (many of which were inherited from the Soviet period) would have serious consequences for the development of the quality infrastructure.

Moreover, the variant of the ‘roadmap’ proposed by Russia includes a measure that goes against the objective of liberalizing the energy market. Russia reportedly asked to prolong the contract for the supply of electricity produced in Cuchurgan when this expires in 2017. It is obviously a move in favor of the Russian concern RAO “UES” (Unified Energy System of Russia), which since 2005 has controlled the Cuchurgan Power Plant that produces electricity with unpaid Russian gas. Such an agreement on the part of Chisinau would run counter to the principles of the Third Energy Package, which cannot be functional without ensuring unhampered competition and liberalization of the Moldovan energy market.

Russia contradicts itself

Some of the points from the ‘roadmap’ suggested by Russia are senseless. A conclusive example is Russia’s proposal for Moldova to fully respect the CIS agreements, in particular the free trade agreement. Currently, Moldova is implementing the provisions of the CIS Free Trade Agreement, but cannot put into practice accords that run counter to the DCFTA.

It is Russia that flagrantly violates the provisions of the CIS agreement on the liberalization of trade. In 2014, this introduced import duties on 19 categories of Moldovan products and different nontariff barriers on the export of fruit, cans and meat.  

Moldova is not the only country in relation to which Russia violates the CIS agreement. Ukraine is subject to even harsher restrictions by Russia, which recently introduced a ban on the transportation of banned Ukrainian products through its territory.

So, Russia should first comply with the free trade requirements in the CIS before asking this of the Moldovan side, which didn’t stop implementing the CIS Free Trade Agreement after Russia introduced a series of barriers on its market.

What is Russia’s intention?

Russia included a multitude of subjects in the ‘roadmap’ not at all accidentally. First of all, this can hamper the negotiation process for the Moldovan authorities because (resolvable) economic matters are mingled with (sensitive and difficult) (geo)political matters.

Secondly, a large number of problems included intentionally in the agenda necessitate considerable political and institutional resources, which would distract attention from urgent matters related to the implementation of the European agenda.

Thirdly, the ‘roadmap’ in the variant proposed by the Russian authorities aims to convince the Moldovan public that the relationship with Russia is indispensable. This would enable the pro-Russian players in Chisinau, in particular during the presidential campaign, to become involved in electoral lobbying for restoring the Moldovan-Russian relations, even by making concessions.

Last but not least, the ‘roadmap’ in the Russian variant aims to thwart the implementation of the DCFTA. The Moldovan authorities promised yet that the document that will be signed in the end will not condition the review of the agreements with the EU. But this does not annul Russia’s intention to influence Chisinau to make particular concessions. The implementation of the standardization, metrology and other systems of the CIS, which are generally Russian, simultaneously with the European ones, represents one of the short-and medium-term objectives of Russia.

Instead of conclusion

Even if the ‘roadmap’ suggested by Russia is not a final document, it anyway arouses suspicions and uncertainty. It is evident that the Russian authorities pursue multiple objectives, including to test Moldova’s commitment to the EU (DCFTA). 

Though the document is presented as a plan of action for restoring the Moldovan-Russian commercial relations, major emphases seem to be placed on (geo)political matters.

The Moldovan authorities must insist on a ‘roadmap’ focused strictly on the bilateral trade. The removal of the tariff and technical barriers introduced by Russia after 2013, not the provision of privileges to the Gagauz and Transnistrian authorities, should be the core subject of the document.

The return to the Russian market must not be conditioned by political or economic concessions and should be determined by concrete agreements concerning the quality and origin of the Moldova products.

In any circumstances, the Moldovan authorities should reject proposals for implementing the standardization, metrology and other systems of the CIS/Russia in parallel with the European ones. Such a scenario violates a series of commitments related to the DCFTA made by Moldova and goes against the logic of economic integration into the EU.

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