Fule: the EU will stand by those who are subject to undue pressures

Fule: the EU will stand by those who are subject to undue pressures

Statement of the European Commissioner for Enlargement and Neighbourhood Policy on the pressure exercised by Russia on countries of the Eastern Partnership

Sourse: Delegation of the European Union to Ukraine.

European Parliament Plenary, September, 11st

Opening remarks

Chairman, Honourable Members,

The Eastern Partnership Summit in Vilnius is fast approaching. It promises to mark a momentous step forward in our political association and economic integration with several of our eastern European neighbours. Clearly - and wrongly - this is seen in some quarters as a threat. As a result, we have seen enormous pressure being brought to bear upon some of our partners.

The European Union has always been perfectly clear about its policy towards our Eastern neighbours. Our common interests dictate that we should work with our eastern neighbours to build a zone of prosperity and stability in our continent. Already the existing Partnership and Cooperation Agreements, signed in 1994, foresaw the development of a free trade area. Feasibility studies launched in 2004 led to the development of "deep and comprehensive free trade areas" as an integral part of the "new enhanced agreements" – subsequently known as Association Agreements – proposed in 2006. The first DCFTA negotiations started with Ukraine in 2008, as soon as it had become a WTO member. The Commission's Communication of 2008 then laid the basis for the offer extended to our Eastern Partners at the Prague Summit establishing the Eastern Partnership in 2009 and confirming our joint objective of political association and economic integration underpinned by AA/DCFTAs. From the beginning, the European Parliament has strongly supported this approach of transforming this part of Europe both politically and trade-wise.

It is true that the Customs Union membership is not compatible with the DCFTAs which we have negotiated with Ukraine, the Republic of Moldova, Georgia, and Armenia. This is not because of ideological differences; this is not about a clash of economic blocs, or a zero-sum game. This is due to legal impossibilities: for instance, you cannot at the same time lower your customs tariffs as per the DCFTA and increase them as a result of the Customs Union membership. The new generation of Association Agreements will bring enormous transformative benefits through legal approximation, regulatory convergence, and market liberalisation. Independent studies indicate that a DCFTA will bring substantial benefits. Exports to the EU could double over time, leading to increase in GDP of up to approximately 12%. But in order to implement these, our partners must enjoy full sovereignty over their own trade policies, which members of the Customs Union will not.

It may certainly be possible for members of the Eastern Partnership to increase their cooperation with the Customs Union, perhaps as observers; and participation in a DCFTA is of course fully compatible with our partners' existing free trade agreements with other CIS states.

Let me be clear: the development of the Eurasian Economic Union project must respect our partners' sovereign decisions. Any threats from Russia linked to the possible signing of agreements with the European Union are unacceptable. This applies to all forms of pressure, including:

• the possible misuse of energy pricing;

• artificial trade obstacles such as import bans of dubious WTO compatibility and cumbersome customs procedures;

• military cooperation and security guarantees: and

• the instrumentalisation of protracted conflicts.

This is not how international relations should function on our continent in the twenty-first century. Such actions clearly breach the principles to which all European states have subscribed. In the Helsinki Principles of the OSCE we have committed to respect each country's "right freely to define and conduct as it wishes its relations with other States in accordance with international law". The European Union will support and stand by those who are subject to undue pressures.

Let me emphasise that AA/DCFTAs are not conceived at Russia's expense. On the contrary, Russia will also benefit greatly from the integration of the Eastern Partnership countries into the wider European economy. Our vision is that these agreements should contribute in the long term to the eventual creation of a common economic space from Lisbon to Vladivostok, based on WTO rules.

So we encourage our partners to deepen their ties with Russia, as we do ourselves, but in a way which is compatible with AA/DCFTA obligations. The European Union is ready to work with its neighbours to find ways to promote greater regulatory convergence between the EU and members of the Customs Union. The last thing we want to see is a protectionist wall cutting our continent in two. In today's ever-more-competitive global economy, we cannot afford to waste our efforts on a regional geopolitical rivalry.

Closing Remarks

Chairman, Honourable Members,

We need to do a better job of explaining to Russia why it also stands to benefit from the creation of DCFTAs between the European Union and its traditional economic partners. The trade-creation effects will undoubtedly be more important than the trade-diversion effects, contrary to what some of our Russian friends fear. We will raise this issue in our bilateral dialogue with Russia.

I understand that Russia sees the extension of European Union standards and norms as a potentially problematic issue because they are currently not always identical with those of the Customs Union. However, we are already now actively cooperating with Russia on the alignment of many norms and standards. This is a key element of the European Union-Russia Partnership for Modernisation. And these standards are also increasingly adopted by the Customs Union. European Union norms are often adopted internationally, and are of course fully compatible or identical with WTO rules. So the European Union is actually helping all our partners including Russia to modernise and open up to globalisation.

Likewise, the New Agreement we have been negotiating to replace the European Union-Russia Partnership and Cooperation Agreement should include provisions for greater convergence of the regulatory framework between the European Union and Russia and thereby help to generate stability and predictability for both Russian and European Union companies.

When we set out to build the Eastern Partnership at Prague in 2009, there was no talk of the Eurasian Union project. It is the Russian decision to build the Customs Union and the Eurasian Union that created a situation where our European partners are now confronted with a choice between two projects for regional economic integration. It is inconceivable that our partners should become victims of their incompatibility. It is inconceivable that through a decision, made freely, our partners should be punished and their trading relationship with customs union members threatened to be placed under far worse conditions than our own arrangements.

We stand by on our side to do all we can to avoid this and work with our neighbours to find ways of maximising the compatibility between the EU and Eurasian structures in a way that can facilitate trade and economic integration.

Thank you.