The 4th East Forum Berlin organized by the Committee on Eastern European Economic Relations with the support of the Administration of Berlin, METRO Group and UniCredit S.p.A. took place in Berlin on 18–19 April.
The forum was initially established as a platform for politicians and businessmen to discuss the prospects of the space “from Lisbon to Vladivostok”. Despite all the sanctions and counter-sanctions, the more than 40% plunge in trade between Russia and the EU in 2015, the harsh rhetoric coming from Poland, the Baltic nations and a number of other Eastern European countries as regards cooperation with Russia, there was particular emphasis at the forum that the common space “from Lisbon to Vladivostok” is not an unattainable goal.
The forum participants stressed that today’s world is one of multiple connectivity that may overlap, be compatible or, on the contrary, compete. For retail organizations, the ‘wired world’ signifies the partial ‘dilution’ of WTO standards and principles: integration associations around the world create their own internal ‘rules of the game’, thereby undermining the kind of universality that was anticipated with the establishment of the WTO. It is the job of politicians to create optimal conditions to avoid integration conflicts.
Over the course of two sessions, the politicians and businessmen discussed China’s initiative for the “Silk Road Economic Belt” and opportunities for cooperation with the EU and EEU. It was noted on multiple occasions that politicizing economics is not conducive to the economic development of the EU, its eastern neighbours or the EEU. Experts estimate that the overall losses from sanctions for all countries are closing in on USD 1 trillion. It was emphasized during the meeting that Europe has an economic interest in cooperation with the EEU, however at present the EU is not willing to give up on the idea of achieving political results using economic measures, even if they are detrimental for everyone.
RIAC Program manager Elena Alekseenkova spoke at the event on behalf of the Russian International Affairs Council, serving as an expert during one of the event sessions devoted to cooperation between the European Union and the Eurasian Economic Union. During the event, Elena Alekseenkova answered questions by the forum organizers concerning Russia’s vision of EU–EEU cooperation.
Please see below for an interview.
How the issue of interaction between the EU and EAEU are looking from Russia’s perspective?
Elena Alekseenkova: Russia is involved in a heated discussion of possible cooperation between the EU and EEU.
In November 2015 the Eurasian Economic Commission has sent a letter to the president of the European Commission Jean-Claude Juncker with the proposal to initiate cooperating in several spheres. However, in February 2016 Jean-Claude Juncker sent a letter not to the Eurasian Commission, but on the name of Russia’s President Vladimir Putin. This letter was widely discussed in Russia, because 1) it was sent to Russian President meaning that the EU sees the EEU not as a union of equal partners, but as Russia’s organization and 2) because in the letter the issue of interaction is linked with the Ukrainian crisis and fulfillment by Russia of the Minsk 2 agreements, that again highlights that EEU is perceived as Russia’s project.
So, the analysis of this exchange and the review of publications and expert statements in Europe on this issue shows that European Union considers the EEU as another Kremlin “reincarnation”, new version of USSR, where four member-states except Russia do not have any voice or any kind of subjectivity. And of course it was perceived as a sign of disrespect to other EEU members. Is it exactly what the EU wanted to demonstrate?
Regarding the issue of lacking subjectivity: the decisions made inside the EEU are all taken unanimously - one country has one voice. Besides the organization is purely economic. The Commission itself is not allowed even to discuss education, which is closely connected to the economic cooperation and labour market. Common economy will unavoidably need common education and qualification standards. But at the moment it’s not even discussed.
So it’s only about economy. And it’s constantly emphasized by all member-states and by Commission itself. Nazarbaev put forward the idea of the Union at 1990-s aiming to keep working those cooperation ties and production chains that existed between the economies of the post-soviet countries after the USSR collapsed. And at that time countries rejected the idea, because they feared for their newly acquired sovereignty. Today the situation is totally different. Nobody fears for the sovereignty because it’s absolutely guarantied and will never be questioned.
One more remark on the EU’s ignorance towards the EEU. Russian population is only 75% of the EEU population. And this population has no relation neither to Ukrainian crisis nor to the Minsk agreements. Does this mean that 24% of the population means nothing for the EU? Sounds not very European.
Another argument that is often put forward by the European think-tanks is that the EEU is only taking shape as an institution, many legislative acts are still not implemented, some of them are ignored by the member-states, some decisions not coordinated with all member-states, etc. Yes, that’s true. The Union was launched only in January 2015 and is still at the early stages of internal development. We have a lot of “homework” to finish: to coordinate trade policy, to unify investment policy and non-tariff barriers, to create a law-enforcement procedures etc. But let’s remember the EU history. It took years and even decades before the process was completed and we could see the EU as it’s now. But does this mean that during all these decades the EU didn’t interact with the outside world? Of course not. Than why the EEU shouldn’t?
Here comes another question: is the EU interested in a weak or a strong EEU? Of course if the answer is “weak” than it’s all clear, but it 1) doesn’t correspond with the EU rhetoric concerning strong and prosperous neighbors and 2) then be ready to have poor and unstable countries on the East and a very possible explosion of Central Asia.
If the answer is “strong”, then the EU should start cooperation with the EEU, because it will give an opportunity to seriously improve the EEU working mechanisms, especially norms, standards, practices etc. The Eurasian Economic Commission is closely studying the EU’s integration experience aiming not to repeat mistakes. So, the exchange of experience could be very helpful. Sooner or later the EEU will overcome the initial period and after that it’ll stand on the equal footing with the EU. It is in the EU’s interests to influence EEU’s development.
As for the possible formats of cooperation, Russian experts consider reasonable to build partnership between the EU and the EAEU in the format of the flexible investment and trade alliance. An FTA per se between the EU and the EAEU doesn’t correspond to the interests of Russia and Kazakhstan, that are exporters of hydrocarbon resources. But the format of “Mega- Deal”, where concessions and compromises should be exchanged, and where stakeholders can provide wide range of opportunities for one side while enjoying an open access to spheres of their interest.
Why such a cooperation is needed from the both sides?
Elena Alekseenkova: First of all it’s worth mentioning that the EU is one of the most important trading partners for the countries of the Eurasian economic union. Russia has become the fourth trading partner of the EU in 2015, but before it was third on the list. The EU is the main investor for the majority of the EEU countries. So we are highly important partners for each other from economic point of view.
In this sense the reduction of existing trading barriers between the EU and EEU may boost business on both sides. Besides the EU could benefit from set rules of the game on the market of 180 mln people, transparent investment protection and standardized norms of law-enforcement.
Despite the efforts of business-structures of both integration associations to encourage trade, investment and financial ties on the microeconomic level, economic cooperation on the macro- level is reduced because of the sanctions war.
What are the concrete fields of cooperation between the EU and EEU?
Elena Alekseenkova: Into the list of concrete fields of cooperation we may include the following:
- standards and questions of technical regulation,
- trade tariffs and non-tariff barriers,
- energy security,
- investment guaranties,
- negotiations with neighbors in between the EU and EEU
- development of cross-border infrastructure,
- liberalization of the access to the financial markets,
- right on intellectual property,
- the dialogue between the EU-EAEU – China on “Silk Road Economic Belt” initiative,
- rules of competition,
- dispute resolution mechanisms,
- etc.
As we see the list of potential field of cooperation is rather long and it may be continued. Of course the investments and trade with the EEU area may be not so attractive as trade with the US or China and South-East Asia, but still the EU has invested a lot into this market and a lot of European companies have their stakes in this area. So why not try and help them with creation of more comfortable conditions? Today this area is perceived as a high risks zone. All these measures listed above may help to reduce these risks and give impetus for development. And what is even more important and won’t require much from the EU — stop politization of the economy.
