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ESI-MGIMO, MOSCOW 13 AND 14 NOVEMBER 2017 EU – RUSSIA RELATIONS AND EU - EURASIAN ECONOMIC UNION

ESI-MGIMO, MOSCOW 13 AND 14 NOVEMBER 2017 EU – RUSSIA RELATIONS AND EU - EURASIAN ECONOMIC UNION. PROF DR JAAP W. DE ZWAAN EM. PROFESSOR EUROPEAN UNION LAW ERASMUS UNIVERSITY ROTTERDAM THE NETHERLANDS. EU NEIGHBOURHOOD POLICY. Contents 1. International cooperation European Union

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ESI-MGIMO, MOSCOW 13 AND 14 NOVEMBER 2017 EU – RUSSIA RELATIONS AND EU - EURASIAN ECONOMIC UNION

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  1. ESI-MGIMO, MOSCOW 13 AND 14 NOVEMBER 2017EU – RUSSIA RELATIONS ANDEU - EURASIAN ECONOMIC UNION PROF DR JAAP W. DE ZWAAN EM. PROFESSOR EUROPEAN UNION LAW ERASMUS UNIVERSITY ROTTERDAM THE NETHERLANDS

  2. EU NEIGHBOURHOOD POLICY

  3. Contents 1 • International cooperation • European Union • Organization, Policies, Institutions and Decision making • Internal Market, Customs Union and Common Commercial policy • EU and External Relations • EU Neighbourhood Policy (ENP) • EU-Russia relations • PCA 1997 • Russia and WTO

  4. Contents 2 • Eurasian Economic Union • Organization, Policies and Achievements • EU and EEU, a comparison • Between organizations • On substance • Restrictions and Opportunities for future cooperation • Russia-Ukraine • EU Sanctions and Russian retaliation measures • Cooperation per Sector • People to People contacts

  5. International cooperation • Intergovernmental • Sovereign States • Consensus • Approval by national parliaments • Supranational • Transfer of competences • Institutions • Decision making procedures • Legal instruments • Own financial resources • Legal personality

  6. European Union • Peace project • After the Second World War • Peace, stability and prosperity • From 6 to 28 Member States • Enlargement: candidate-Member States • Shrinking: withdrawal United Kingdom (‘Brexit’)? • Agenda • Economic cooperation including EMU • Justice and Home Affairs • Foreign policy and Defence

  7. Policies European Union 1 • Internal market • Area without frontiers: free movement of goods, persons, services and capital • Internal market ‘plus’(selection) • Transport • Agriculture • Environment, Research • Social and regional • Energy • Economic and Monetary Union • Coordination national economic policies • Euro as single currency

  8. Policies European Union 2 • Justice and Home Affairs • Free movement of persons • Visa, Asylum and Immigration • Criminal law cooperation • Police cooperation • Common Foreign and Security Policy • Foreign policy • Defence

  9. EU Institutions 1 • European Council • Political guidelines • European Commission • Initiator and Executive • Council of Ministers • Decision making power • European Parliament • Co-legislative and co-budgetary powers

  10. EU Institutions 2 • Court of Justice • Control application and interpretation EU law • European Central Bank • Conducts monetary policy of the Union • Court of Auditors • Carries out the Union’s audit

  11. Decision making • Joint decision making (co-decision: the ordinary legislative procedure) • Initiative Commision • (Provisional) Position Council of Ministers • Amendments European Parliament • Common agreement Council and European Parliament • Special legislative procedures

  12. EU Policies:Internal Market: Article 26(2) TFEU The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.

  13. EU Policies:Customs Union: Article 28(1) TFEU The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.

  14. EU Common Commercial Policy: Article 206 TFEU By establishing a customs union …, the Union shall contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers.

  15. EU Common Commercial Policy: Article 207(1) TFEU The common commercial policy shallbebased on uniform principles, particularlywithregardto changes in tariffrates, theconclusion of tariff and tradeagreementsrelatingtotrade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, theachievement of uniformity in measures of liberalisation, export policy and measurestoprotecttradesuch as thosetobe taken in the event of dumping or subsidies.

  16. EU and External Relations • Enlargement • EEA (Norway, Iceland and Liechtenstein) • Internal market and competition policy • ENP (Neighbourhood Policy) • Eastern and Southern neighbours • Association Agreements • Free Trade Agreements • For example TTIP (United States) and Ceta (Canada) • Partnership and Cooperation Agreement (Russia) • Development cooperation • Cotonou: former colonies • General policy

  17. CONTEXT: EU NEIGHBOURHOOD POLICY

  18. European Neighbourhood Policy (ENP) • Cooperation with Eastern and Southern Neighbours • Financial support • Economic integration • Easier travel to the EU • Technical and policy support • Multilateral Partnerships • Eastern Partnership • Union for the Mediterranean Partnership • Black See Synergy

  19. EASTERN PARTNERSHIP 1 • UKRAINE, MOLDOVA, BELARUS, GEORGIA, ARMENIA AND AZERBAIJAN • OBJECTIVES • DEMOCRACY, GOOD GOVERNANCE AND STABILITY • SUSTAINABLE ECONOMIC DEVELOPMENT • ENERGY SECURITY • PEOPLE-TO-PEOPLE CONTACTS

  20. EASTERN PARTNERSHIP 2 • ASSOCIATION AGREEMENTS WITH MOLDOVA, GEORGIA AND UKRAINE • EU-UKRAINE ASSOCIATION AGREEMENT • TENSIONS WITH RUSSIA • CRIMEA AND DONBAS • SANCTIONS EU AND • RETALLIATION MEASURES RUSSIA • 24 NOVEMBER 2017: 5th EASTERN PARTNERSHIP SUMMIT (TALLINN)

  21. EU-Russia relations • Partnership and Cooperation Agreement (PCA) 1997 • Four common spaces • Economy and Environment • Freedom, Security and Justice • External Security • Research and Education, including Culture • ESI in Moscow (MGIMO) • 2010: Partnership for Modernization Facility

  22. RUSSIA AND WTO • RUSSIA IS A MEMBER SINCE AUGUST 2012 • FIRST TRADE POLICY REVIEW 2016, PROBLEMS • IMPORT SUBSTITUTION POLICY: COMPLIANCE WITH WTO RULES • LACK OF TRANSPARENCY IN THE FUNCTIONING OF THE EURASIAN ECONOMIC UNION • SUBSIDISING OF THE ENERGY SECTOR • DOMINANT ROLE OF STATE OWNED COMPANIES ON THE MARKET

  23. EU-RUSSIA COOPERATION • OBJECTIVE AFTER 2012 WTO ACCESSION • (COMPREHENSIVE) FREE TRADE AGREEMENT

  24. Eurasian Economic Union • Founded 1 January 2015 • 5 Member States • Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russian Federation • Belarus is not a WTO member • Objectives • Economic Union • Internal market • Customs Union • Cooperation in specific sectors • Legal personality

  25. Eurasian Economic Union Article 1 1. The Parties establish the Eurasian Economic Union ensuring free movement of goods, services, capital and labour within its borders, as well as coordinated, agreed or common policy in the economic sectors determined under this Treaty and international treaties within the Union. 2. The Union shall be an international organisation of regional economic integration and shall have international legal personality.

  26. EEU Treaty Article 4Main Objectives The main objectives of the Union shall be as follows: • to create proper conditions for sustainable economic development of the Member States in order to improve the living standards of their population; • to seek the creation of a common market for goods, services, capital and labour within the Union; • to ensure comprehensive modernisation, cooperation and competitiveness of national economies within the global economy.

  27. EEU Treaty Article 2 (Definitions) ‘Single (common) market’ means a set of economic relations within the Union ensuring the freedom of movement of goods, services, capital and labour.

  28. EEU Treaty Article 2 (Definitions) ‘Common economic space’ means the space consisting of the territories of the Member States implementing similar (comparable) and uniform economy regulation mechanisms based on market principles and the application of harmonised or unified legal norms, and having a common infrastructure.

  29. EEU Treaty Article 2 (Definitions) ‘Customs Union’ means a form of trade and economic integration of the Member States envisaging a common customs territory, within which no customs duties (other duties, taxes and fees having equivalent effect), non-tariff regulatory measures, safeguard, anti-dumping and countervailing measures shall be applied to the mutual trade, while applying the Common Customs Tariff of the EEU and common measures regulating foreign trade with a third party.

  30. Foreign Trade Policy of the EEU Article 33 EEU Treaty Foreign trade policy of the Union shall promote sustainable economic development of the Member States, economic diversification, innovative development, increase in the volume and improvement in the structure of trade and investment, acceleration of the integration process, as well as the further development of the Union as an efficient and competitive organisationin the global economy.

  31. Institutions (EEU Treaty Article 8) • Supreme Economic Council • Heads of Member States • Determine the strategy (consensus) • Intergovernmental Council • Heads of Government • Ensure implementation of the EEU Treaty (consensus) • Economic Commission • Council of the Commission • Board of the Commission • Court

  32. Eurasian Economic Commission • Economic Commission • Council of the Commission • Vice Prime Ministers • Overall management (consensus) • Board of the Commission • EEU Ministers • Initiator and executive (majority voting or consensus)

  33. ACHIEVEMENTS/DEFICIENCIES EAEU • PARTICIPANTS • THREE FOUNDING MEMBER STATES • AT PRESENT FIVE MEMBER STATES • ENLARGEMENT? • INSTITUTIONAL FRAMEWORK • EFFECTIVENESS AND EFFICIENCY • SCOPE OF ECONOMIC COOPERATION • FREE TRADE AREA • CUSTOMS UNION • INTERNAL MARKET • COOPERATION IN SPECIFIC SECTORS

  34. EU and EEU, Comparison between Organizations • Framework of cooperation • Regional cooperation • Nature of cooperation • Integration versus Cooperation/Approximation • Objectives and ambitions • Political union versus Economic cooperation • Characteristics and institutions • Supranational versus Intergovernmental procedures • Decision-making • Majority voting versus Consensus

  35. EU and EEU,Comparison regarding Substance • Similar objectives and ambitions • Stage of cooperation • Advanced versus recent • Size of economy • Big versus (relatively) small • Level of economic integration • Advanced versus (still) limited • Achievements • Union competences versus Member States competences and responsibilites

  36. Perspectives for EU-EEU cooperation • Objective • (Comprehensive) Free Trade Agreement • Obstacles • Ukraine (Crimea and Eastern Ukraine) • Restrictive measures/sanctions EU-RF • Retaliatory measures RF-EU ‘plus’ • Opportunities • Dialogue and negotiations • Cooperation per sector • People to people/civil society contacts

  37. EU RESTRICTIVE MEASURES: OVERVIEW • DIPLOMATIC MEASURES • INDIVIDUAL RESTRICTIVE MEASURES • RESTRICTIVE MEASURES (CRIMEA AND SEVASTOPOL) • ECONOMIC SANCTIONS (SPECIFIC RUSSIAN SECTORS) • ECONOMIC COOPERATION

  38. EU RESTRICTIVE MEASURES: SPECIFICS 1 • DIPLOMATIC MEASURES • SUSPENSION OF MEETINGS • INDIVIDUAL RESTRICTIVE MEASURES • ASSET FREEZE AND TRAVEL RESTRICTIONS • 150 PEOPLE AND 37 ENTITIES • ASSET FREEZE FOR MISAPPROPRIATION UKRAINIAN STATE FUNDS • RESTRICTIVE MEASURES • IMPORT BAN ON GOODS FROM CRIMEA AND SEVASTOPOL • BAN ON INVESTMENTS IN CRIMEA • PROHIBITION TO SUPPLY TOURISM SERVICES IN CRIMEA

  39. EU RESTRICTIVE MEASURES: SPECIFICS 2 • ECONOMIC SANCTIONS (SPECIFIC RUSSIAN SECTORS) • LIMITATION OF ACCESS TO EU PRIMARY AND SECONDARY CAPITAL MARKETS FOR 5 MAJOR RUSSIAN MAJORITY STATE OWNED FINANCIAL INSTITUTIONS • EXPORT AND IMPORT BAN ON TRADE IN ARMS • EXPORT BAN FOR DUAL-USE GOODS • ACCESS TO CERTAIN SENSITIVE TECHNOLOGIES AND SERVICES • ECONOMIC COOPERATION • SUSPENSION SIGNATURE NEW FINANCING OPERATIONS • EU COORDINATION SUSPENSION FINANCIAL OPERATIONS EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD) • REASSESSMENT AND SUSPENSION EU BILATERAL AND REGIONAL COOPERATION PROGRAMMES WITH RUSSIA

  40. RETALIATION MEASURES RUSSIAN FEDERATION(EU, USA, NORWAY, CANADA AND AUSTRALIA) • AGRICULTURE AND FOOD PRODUCTS (MEAT, FISH, FRUITS, VEGETABLES AND DAIRY PRODUCTS) • RESTRICTIONS ON IMPORT

  41. EU AND RF SANCTIONS LOOKED AT IN CONJUNCTION • NOT ALL CHANNELS OF TRADE AND COOPERATION ARE BLOCKED

  42. EU-Russia cooperation: cooperation per sector (examples) • Energy • Agriculture • Modernization and efficiency • Transport and Infrastructure • Environment and Climate Change • Justice and Home Affairs • Migration and border management • International crime/terrorism • Public Health

  43. EU-Russia cooperation:‘people to people’ and civil society contacts • Education • ESI in Moscow (MGIMO) • Research • Culture • Youth • Tourism

  44. EU-RUSSIA RELATIONS: NEED FOR CLARIFICATION • EURASIAN ECONOMIC UNION • ACHIEVEMENTS • TRANSPARENCY • COMPARISON/RELATIONSHIP WITH EU • PERSPECTIVE OF A FREE TRADE AREA • EU - RUSSIA • EU - EAEU • IMPACT OF THE RECIPROCAL SANCTIONS (UKRAINE)

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