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Permanent Mission of the Russian Federation to the European Union

Submitted on 2012-07-30 00:00:00

"Impact of the Eurasian Integration on Russia-EU Relations". Speech by Ambassador Chizhov. Berlin, 15 June 2012

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Statement by Ambassador Vladimir Chizhov at the conference organised jointly by the Valdai Club, the German Foreign Policy Society (DGAP) and the French Institute for International Relations (IFRI) "The new Eurasian Union integration process. How should the European Union react?"
Berlin, 15 June 2012

 

Impact of the Eurasian Integration on Russia-EU Relations

 

Distinguished colleagues,
Ladies and Gentlemen,

Let me start by stating a paradox: amazingly, the emergence of the Customs Union between Russia, Belarus and Kazakhstan and further steps towards Eurasian economic integration were taken by many in Europe, in particular among the leaders of the European Union, as a surprise. Considering that Russia had been traditionally supporting harmonisation and mutually reinforcing development of integration processes unfolding in the Euro-Atlantic region and Eurasia. Alas, for a long time this did not find any response from our partners preferring to disregard not only production, trade and economic, human, cultural, spiritual and language ties historically binding CIS countries, but also the growing centripetal tendencies within the post-Soviet space. This found reflection in the difficult and, I would even say, painful negotiations on the relevant provision of the Russia-EU Roadmap on the Common Space of External Security adopted at the Moscow summit in 2005. Its final version reads as follows:

"The EU and Russia recognize that processes of regional cooperation and integration in which they participate and which are based on the sovereign decisions of States, play an important role in strengthening security and stability. They agree to actively promote them in a mutually beneficial manner, through close result-oriented EU-Russia collaboration and dialogue, thereby contributing effectively to creating a greater Europe without dividing lines and based on common values".

Remarkably, the last point – on Europe without dividing lines – was perceived by our partners in a rather peculiar way. Just to mention the EU Eastern Partnership with its main mechanism of unilateral adjustment of the whole set of national legislations to EU standards and regulations without taking into account the already undertaken obligations existing within integration unions. Take the notion that obligations under the Customs Union a priori rule out a free-trade area with Brussels. It seems rather artificial, since when creating the Customs Union we took WTO norms into account with a view to ultimately creating a common pan-European economic space from Lisbon (or Reykjavik in case Icelanders do not give up the idea of EU accession) to Vladivostok. Obviously, in practice this goal can be achieved through the creation of a free-trade area between the EU and the Eurasian Economic Space.

The very logic of such approach – "either towards the EU or towards Russia" (such statements are, regrettably, not uncommon in the EU) already bears the risk of creating new dividing lines. Placing post-Soviet countries before this artificial dilemma is not only inappropriate but also unfair.

At the same time, progressive development of the regional integration processes within the post-Soviet space could not but raise the issue of an interconnection between European and Eurasian integration. It became most tangible in the course of our negotiations with the EU on the New Basic Agreement (NBA) when we faced a situation where a significant amount of national functions in the fields of trade regulation, competition rules, public procurement, technical requirements, etc. had been transferred to the supranational level, i.e. to the Eurasian Economic Commission (EAEC) which the EU will now have to deal with, whether it wants it or not.

It is encouraging that our partners from EU institutions gradually come to realise these objective realities. Not coincidently, this issue was discussed in a detailed and quite constructive manner at the recent 29th Russia-EU summit in Saint-Petersburg. Moreover, the first contact between the EAEC and the European Commission leadership (Danial Akhmetov – Siim Kallas) took place in Brussels yesterday.

Russia's position on this score is more than clear. It was repeatedly stated by President of the Russian Federation Vladimir Putin and is reflected, in particular, in the "Declaration on Creation of the Common Economic Space between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation" adopted at the meeting of the Intergovernmental Council of the Eurasian Economic Community (the supreme body of the Customs Union) at the level of Heads of State in Moscow on 9 December 2010 as well as in the Statement of CIS Foreign Ministers' Council "On Complementary and Mutually Beneficial Nature of the Development of Integration Processes" of 2 September 2011.

Firstly, we stress that Eurasian integration is open and inclusive, thus implying participation of all interested parties provided they meet certain criteria. Importantly, the term "Eurasian space" used in the union's founding documents to refer to the geographic area covered by the integration process does not pose any limitations for enlargement of the Common Economic Space and in future of the Eurasian Economic Union. It resembles the EU open-door policy but in a much wider continental version and, I stress, without artificial dividing lines.

Secondly, we state the imperative need to establish dialogue with other integration projects, above all with the European Union. Such dialogue should aim at experience exchange and discussion of the ways to ensure a harmonious, complementary and mutually beneficial development of integration processes and cooperation with due respect for the interests of each other. Most crucially, this formula suggests a peaceable and pragmatic conceptual basis for considering the regional integration processes as communicating vessels (and not competing companies as often follows from statements of EU representatives). Just as importantly, we recognise that the young Eurasian project is inherently open to adopting the integration experience of third countries. The nature of this phenomenon was concisely explained by Prime Minister of Russia Dmitri Medvedev who noted we have two and a half years remaining until 1 January 2015 when the Treaty on the Eurasian Economic Union will have been signed in order to accomplish what took Europeans several decades – from 1950s to 1992.

Thirdly, we set the ambitious goal of creating together with the European Union a common economic and human space from the Atlantics to the Pacific – a common continental market worth trillions of euros. I should admit, it is difficult to say how many supporters this idea might find (even in the long term) in the European Union hit by the sovereign debt crisis and the heavy migration and criminal heritage of its enlargement waves. However, this approach reflects our strategic vision of a polycentric world order where only a Greater Europe with its combination of EU investment and technological potential and Eurasian resource base will be able to compete with the rapidly rising Asia-Pacific region.

I am convinced that this approach is of no less importance for the post-Lisbon EU which has significantly strengthened its foreign policy profile and claims to be a self-standing centre of power.

At the risk of being accused of going too far, I would still like to express my strong conviction: this is a unique chance for us to preserve and enhance the position of our continent in a developing and increasingly globalising world. It would be inexcusable to miss this chance.

Cross-effects of the European and Eurasian integration should be considered in progress, taking into account, in particular, the elaboration and the planned signing in 2015 of the Treaty on the Eurasian Economic Union when the degree of consolidation of national competences and the role of the Union's supranational bodies will become even more substantive. For the time being, these are the already operating Customs Union and the Eurasian Economic Commission that is starting to operate which can be considered as real factors.

Naturally, it will take time for the Eurasian Economic Commission to become fully operational and to start exercising all competences provided to it by the international agreements on the Common Economic Space. There may be some frictions and certain difficulties when transferring competences from national bodies and even occasional disputes between the member states. But the vector of development has been defined and it will only gather pace.

Having said this, I should note that recent negotiations between Russia and the EU have demonstrated that, unfortunately, we are often lagging behind. It was the case with the negotiations on WTO – we had not concluded them before Russia, Belarus and Kazakhstan agreed on creation of the Customs Union, so at the final stage respective corrections had to be made. We faced the same situation during negotiations of the New Basic Agreement which started in July 2008 after an 18-month delay and stalled again due to a "technical pause" a year and a half ago. As a result, it has become necessary to reflect in the agreement not only the creation of the Customs Union, but also the emergence of the Eurasian Economic Commission holding broad economic competences. Thus, we are facing a real problem – how to reflect in the bilateral agreement the role of the Eurasian Economic Commission having the deciding vote on a number of issues concerning trade in goods and later in the field of services and investment. In future this problem will arise with respect to an even wider range of economic issues. If we wait for the Customs Union to become a WTO-recognised integration structure (which implies, inter alia, WTO membership of all participating states), it will take years. My EU partners at the negotiations speak of a period of 5-10 years and then they themselves reject it as too long. I think we all, first of all our strategic partners, should look the reality into the eye and consider more radical solutions to issue related to recognition of the competences of the Customs Union. They would be most practical in the present conditions. We are ready for that having a clear vision of the future of the integration processes.

Of course, we respect the arguments of EU representatives referring to the limited negotiation mandate they have received from EU member states. But any mandate can be modified or expanded – it is a matter of political will.

In conclusion, I would like to present another point that I consider important. Consolidation of the markets of EU member states was, to a significant extent, inward-oriented since trade within the EU accounts for more than 60 per cent of external trade of EU member states. In the Customs Union, the situation is exactly opposite. So far, trade volumes of member states with third countries significantly exceed those within the Customs Union. That is to say that in the short term development of the Customs Union will be quite an important factor for the foreign trade policy of its member states. Therefore, finding a way to reflect the existence of the Customs Union in intergovernmental relations between Russia and the EU seems almost an imperative. We need to bear this in mind when considering the prospects of economic relations and it should be remembered by those EU member states who, as we understand, tend to oppose the establishment of direct contacts between the European Commission and the Eurasian Economic Commission.

On the other hand, in such areas as transport and infrastructure, life itself moves the European Union towards establishing relations with the bodies of the Customs Union. Otherwise all ambitious plans of creating transcontinental corridors to China and other Asian-Pacific countries will inevitably be hampered by, perhaps, physically invisible but economically quite tangible barriers – the same dividing lines, in fact.

And my last remark. The Common Economic Space and its part – the Customs Union – are open international formations. Perhaps, they will be attractive to other CIS partners of Russia and members of the Customs Union as well; at the current stage we already see such indications. Further expansion of the Customs Union membership, in case negotiations on the Russia-EU agreement are not concluded by that time, will bring additional problems to the negotiation process. In that way we will only put off the prospect of signing the NBA and an agreement on a free-trade area. Hardly will that be in our mutual interest.