Criticizing the DCFTA and justifying the commercial sanctions imposed by Russia, President Igor Dodon cites Moscow’s concerns that Moldova will import duty-free products from the EU and will re-export them, also duty-free, to Russia: “Our Russian partners’ arguments are the following: as long as we can export freely these products to the European Union, there is a risk that these European products will be re-exported through Moldova”. The authors of a new Sic! article say the truth is that Moscow introduced a number of restrictive measures, most of which were justified officially through sanitary reasons. A single measure – introduction of customs duties for Moldovan goods – can be related to the danger of re-export, IPN reports.
The article says that from legal viewpoint, the measures taken by Russia cannot be justified. The Free Trade Agreement of the CIS provides for protection measures. Neither when signing the DCFTA nor later were there reasons for Russia to mopes tariff measures. The authors said it’s true that the Moldovan re-exports account for a large part of the exports, especially to Russia, in percentage. On the other hand, these figures are insignificant from the perspective of Russia’s foreign trade. For comparison, in 2016 Moldova’s exports to Russia totaled US$ 233 million, both re-exports and national goods. The same year Russia imported goods to the value of over US$ 182 billion. So, Moldova’s exports represented only 1/772 of Russia’s imports in 2016.
The Moldovan re-exports in 2016 came to US$ 694.4 million. But only 162 million of these went to the CIS. Most of the re-exports of Moldova anyway go to the EU – US$ 463 million. Consequently, the danger of re-export of European products to Russia via Moldova was exaggerated.
The projections or fear of Igor Dodon and Moscow that Moldova will be invaded by European goods owing to the DCFTA, which could later reach Russia, turned out to be unjustified. In terms of volume, Moldova’s imports from the EU increased insignificantly, by only 3.1%. Moreover, they decreased considerably in terms of value – from US$ 2.56 billion (2014) to US$ 1.97 billion (2016).
Thus, the provisions of the Free Trade Agreement of the CIS that enable to raise customs duties are not applied: Imports from the EU into Moldova didn’t increase suddenly, while exports to Russia and the CIS are decreasing. The measures taken by Moscow are not reasonable even if they are considered as preventive ones. Not all the explorers in Moldova are ill-intentioned. Russia could simply impose customs duties depending on the initial country of origin: if a firm from Chisinau exports Italian drugs to Russia, the Russian authorities could apply a cosmos duty strictly on that product.
Even if there are exporters that cheat and do not indicate the country of origin of the goods sent to Russia, this problem could be solved by ensuring closer cooperation between the customs bodies of the two states, not by punishing all the exporters. Moreover, the DCFTA of which Moscow is apparently afraid, has also a component on the customs reform. So, the complete implementation of this agreement could reduce the cases of hidden re-export, which would be beneficial to Russia too. The full article can be read here.
Sic! is a fact-checking, synthesis and analysis project implemented by IPN with support from Soros Foundation Moldova and the Black Sea Trust.
