08.03.2009
Legal Options for Russian-EU Cooperation
№1 2009 January/March

The present bilateral cooperation between Russia and the
European Union rests on an extended Partnership and Cooperation
Agreement of June 24, 1994, concluded between the European
Communities and their member states, on the one part, and the
Russian Federation, on the other part. This Agreement is usually
described as bilateral – between Russia and the EU. But strictly
speaking, the Agreement is multilateral as one party that signed it
was Russia and the other included the then 15 member states of the
European Community, the European Coal and Steel Community, and the
European Atomic Energy Community, plus these three organizations
per se – that is, 18 international legal entities. Considering the
changes in the EU that have taken place since then, the ‘Community’
as the other party to the Agreement is now represented by 29
international legal entities. According to Article 104 of the
Agreement, “the term ‘Parties’ shall mean the Community, or its
Member States, or the Community and its Member States.”

This formal feature of negotiability has an important practical
value – negative for Russia – as it concerns procedures for
harmonizing and approving (ratifying) EU agreements and for their
entry into force. For instance, the Russia-EU Agreement, signed in
June 1994, entered into force only on December 1, 1997, as three
more states joined the EU after its signing.

As regards matters of regulation, the Agreement is a full-scale
international treaty on a multifaceted partnership in the following
areas: politics (“political dialogue”); merchandise trade;
cooperation in business and investment, including the establishment
and operation of companies; cross-border services, in particular in
transport and communications; the movement of capital, financial
services and payments; the social sphere; competition problems;
intellectual property protection; industrial and economic
cooperation; standardization; statistics; customs; the protection
of consumer rights; science and technology; culture; education;
agriculture; energy; the environment; the harmonization of
legislations; etc. Naturally, the cooperation between the two
parties was not equally agreed for all the areas and has not become
equally intensive.

The very status of the document as a partnership agreement is
higher in the hierarchy of agreements concluded by the EU with
third countries than just a trade or economic agreement.
“Partnership” can be understood as cooperation based on the common
goals and principles specified in the Preamble to the Agreement,
including democracy, human rights, rule of law, a socially-oriented
market economy, etc.

Special mention should be made of the mutual granting by the
parties of most-favored status – not only with regard to
merchandise trade but also to certain types of services, the
establishment of companies, the provision of banking and insurance
services, the movement of capital and current payments, etc. The
Agreement also streamlined the mutual use of anti-dumping
procedures and countervailing measures. Characteristically, the
Agreement’s provisions are based on the rules and criteria
established by the General Agreement on Tariffs and Trade and the
General Agreement on Trade in Services. Articles 10, 11, 12, 13,
18, 47, 51 and 94 of the Agreement have direct references to the
two organizations’ provisions. Thus, Russia, which is not a member
of either the GATT or the GATS, was made partly bound to act within
the norms of the two General Agreements.

Article 3 of the Partnership and Cooperation Agreement provides
that the parties “shall examine together in the year 1998 whether
circumstances allow the beginning of negotiations on the
establishment of a free trade area.” However, things have not
budged an inch since then. It must be said, though, that this task
is not simple and its solution requires gradual and selective
measures. A free trade area must not be a “union of pedestrians and
horsemen,” like, for example, the North American Free Trade
Association (NAFTA) where Mexico proved to be a raw material
appendage and a cheap labor reserve with regard to the United
States and Canada.

The PCA also contains an important provision about a “political
dialogue” that should be established between the parties. Analysts
say that it is in this field that the parties have achieved the
most significant progress since the Agreement entered into force.
One can also mention the success achieved by Presidents Dmitry
Medvedev and Nicolas Sarkozy on August 12, 2008, at the height of
the South Ossetian crisis, in agreeing on six principles for the
settlement of the conflict. The French president acted as the
President of the European Council and in the spirit of the 1994
Agreement.

On the whole, an analysis of the Agreement suggests the
conclusion that it has proven adequate from the point of view of
Russian interests. Importantly, the 1994 Agreement was agreed and
signed at a time when the West was euphoric over the disappearance
of the threat of the expansion of Soviet Communism, which loomed
large during the Cold War. Now the situation has changed:
considering the increased number of EU member states, the principle
of consensus used in concluding such agreements, and the unbridled
anti-Russian activity on the part of some U.S.-influenced partisan
members of the EU, it is difficult to expect an early resumption of
a negotiating climate that would be favorable to Russia.
Characteristically, the negotiations on a new Russian-EU agreement
were suspended on September 1, 2008, as a kind of “sanction”
pending the withdrawal of Russian troops from Georgia.

PROSPECTS FOR CONCLUDING A COOPERATION AGREEMENT

Although the strategic base and interests for the continuation
of cooperation between Russia and the rest of Europe objectively
remain the same, the tactical goals of the Parties seem to have
switched places. Whereas in the early 1990s the EU was more
inclined to include in the Agreement non-binding general provisions
pertaining to humanitarian and liberal values, now it is speaking
of a strategic partnership based only on common interests. The
Europeans would like a new basic document to provide for
everything, down to the smallest detail. Russia, for its part,
rightly fears binding provisions that would bring about minimum
positive results – especially now that the EU has admitted new
members, some of which have taken an intransigent attitude toward
cooperation with Russia. This attitude was graphically illustrated
first by Poland’s and then Lithuania’s “vetoes” which blocked for
months the beginning of negotiations on a new agreement.

Russia wants the new agreement to be “a serious document that is
at the same time not burdened down with specifics,” as President
Dmitry Medvedev said in an interview with the Reuters News Agency.
“It is more of a framework, after all, setting out the main
outlines for development over the years to come.” According to
Russian interests, more specific issues should be regulated on an
on-going basis by bilateral agreements.

There is a belief that the enlargement of the EU to the East and
the Balkans only plays into Russia’s hands – supposedly it is
easier to negotiate with the united EU than with individual
countries. In fact, however, Russia would prefer to negotiate
practical issues of cooperation directly with interested EU member
countries. The present situation only allows individual EU members
to use their EU membership to serve their own interests. For
example, Poland, regardless of the EU, held direct negotiations
with the U.S. on the deployment in that country of elements of a
U.S. missile defense system directed against Russia. However, when
it came to the need to promote the export (re-export) of
low-quality Polish meat to Russia, Warsaw used all EU instruments
to exert pressure on Russia. Lithuania behaves in the same way – it
can limit transit across the Kaliningrad region and restrict the
visa regime there in a “sovereign” way, yet it uses the Brussels
levers to ensure Russian oil supplies for the needs of a Lithuanian
oil refinery.

Energy is the basic factor of interdependence between the EU and
Russia. But the parties differ on the nature and essence of how
this interdependence should be codified in their bilateral
agreement. The EU is strategically interested in geographically
accessible Russian energy resources; yet it seeks – in an
absolutely inadequate way – to diversify its energy imports,
especially gas imports. In the course of negotiations on a new
agreement with Russia, the EU will apparently insist that Moscow
ratify and implement the Energy Charter Treaty, signed in 1991
(including the Transit Protocol), which provides for predominantly
Western investment (and its protection) in the extraction and
transportation of hydrocarbons from Russia. Meanwhile, the Charter
does not provide for preferential treatment for Russian investment
in the energy infrastructure in EU countries. Also, its mechanisms
for ensuring the transit of Russian hydrocarbons have proven
ineffective; in particular, they are unable to protect against the
siphoning of transit gas by Ukraine, which is a party to the Energy
Charter Treaty. Moreover, the EU has been making undisguised
efforts to limit access to EU infrastructures (networks and
underground storage facilities) for Russian hydrocarbon suppliers
and to divide energy monopolies, including foreign suppliers, into
oil and gas extraction, transportation and marketing companies.

Naturally, while negotiating a new agreement, Russia is
interested in ensuring a balance between guaranteed supply and
demand within the framework of its energy security concept and in
achieving a situation where its massive investment in hydrocarbon
production and transportation will not be in vain but will be
guaranteed by demand. At present, it would be much more attractive
and reliable for Russia to meet its pragmatic interests through
“separate” agreements with individual partners, patterned after the
North Stream or South Stream agreements. Russia has found it
productive to legalize such projects in private contracts, rather
than in interstate agreements. The energy policy still remains
within the purview of individual EU countries, but if this policy
were in the competence of the EU, the projects would have been
blocked by the Polish-Baltic faction in the EU under strong U.S.
pressure.

In general, oil and gas resources must be under effective state
control as national property everywhere in the world – and Russia
is no exception. This postulate cannot be ignored in the relations
between Russia and the European Union, either.

The European Union is also interested in unimpeded and
inexpensive transit flights by civilian airlines over Russia’s
territory. During negotiations, the Europeans will likely insist
that Russia abolish trans-Siberian overflight fees for EU airlines.
Like in the energy sphere, Russia’s transit capabilities constitute
a security factor. Russia could make the EU’s demands conditional
on the solution of the problem of transit from the main part of
Russia to the Kaliningrad area across Lithuania and Poland and on
the visa regime issue in general.

Apparently, the EU – in keeping with its “tradition” – will try
to use the new agreement to impose on Russia commitments on its
“democratization,” human rights, etc. The Chairman of the Committee
on Foreign Affairs of the European Parliament, Jacek
Saryusz-Wolski, a Polish adept of democratic messianism, said in an
interview with the Russian Vremya Novostei newspaper (September 18,
2008): “Those who say, ‘Let’s just trade with Russia; let’s not
insist on discussions on human rights and democracy,’ are in fact
not friends of Russia. The true friends are those who say that
Russia deserves the same freedom that we have.” “Friendly” help,
the way Saryusz-Wolski sees it, should, for example, provide for
sanctions against Russia, which he unsuccessfully tried to push
through the European Parliament in light of the Caucasian conflict.
Such verbal attacks on the part of the EU over alleged human rights
violations in Russia or the unfreedom of Russian mass media should
be adequately counted, for example, by evidence of gross violations
of political and social rights of ethnic, including Russian,
minorities in Latvia and Estonia. However, Brussels consistently
ignores these facts, although the protection of the rights of
ethnic minorities was given special mention in the 1994
Agreement.

In light of Russia’s proposal for creating a new European
security system and as a follow-up on the 1994 Agreement’s
provisions about “political dialogue,” it is essential that the new
agreement bind Russia and the EU to pool efforts in building a
pan-European security system and for an early prevention of armed
conflicts.

When it came to saving the pro-American regime in Georgia in
August 2008, the EU showed an extraordinary interest and efficiency
in negotiations with Russia. But when the United States tried to
impose anti-Russian missile defense systems on individual EU member
states, the EU washed its hands of it, arguing that it was a matter
of bilateral relations of the Czech Republic and Poland with the
U.S. The deployment of U.S. missile defense systems and other
similar actions must be a matter of pan-European security and must
be regulated in negotiations between the EU and Russia. The new
Russian-EU agreement must provide for equal and mutually
advantageous opportunities for the parties for settling any
threatening crisis situation.

It would be advisable for Russia to propose that the new
agreement describe as counterproductive the export of “colored”
revolutions. Efforts to expand the so-called “space of democracy”
in the post-Soviet space not only violate the fundamental
international legal principles of respect for the sovereignty
rights and of non-interference in internal affairs of other states,
but they have also seriously impeded the development of some newly
independent states and aggravated the internal political situation
there.

MOVING IN RIGHT DIRECTION

It seems that in its home and foreign policies Russia adheres to
the same principle: “Movement is everything; the goal is nothing.”
However, the question “Where?” remains. As regards foreign policy,
there are only two options for Russia. The first one is
self-sufficiency. This option has been chosen by the great Asian
powers India and China. They can afford it, as they can use their
inexhaustible human potential. For Russia, this path would
certainly be a dead-end. The second option is development in an
alliance, cooperation and integration (its rate may vary) with
other countries. The best example is the European Union.
Unfortunately, Russia does not have partners yet, who would want to
integrate with it.

The Chairman of the Central Bank of Russia, Sergei Dubinin,
proposed a bold idea that Russia and the U.S. conclude a bilateral
agreement on the establishment of a “New Entente.” Although I do
not share Dubinin’s view on Russia’s role in the Entente of the
early 20th century, I cannot but agree that a New Entente could be
a great and salutary benefit for Russia. On the other hand, a
U.S.-Russian “Entente Cordiale” does not seem practicable in the
foreseeable future; moreover, it is utopian. Suffice it to say that
the U.S. already has an “Entente” that suits it perfectly well –
this is the anti-Russian NATO, where Russia is not welcome. NATO
and a “New Entente” cannot coexist either, as they would be
incompatible with each other. Obviously, overcoming the firmly
established American idiosyncrasy for Russia will take at least as
many years as it took to foster an enemy image of Russia.

It would be more reliable to proceed from what is really
possible. Naturally, this “possible” will not be achieved overnight
or with the wave of a magic wand. It will require a gradual
integration of Russia into really partner and allied relations with
the European Union, which may outgrow into EU membership in the
long term. French President Nicolas Sarkozy, in his speech at an
international conference in Evian on October 8, 2008, expressed
confidence that Russia could become a privileged partner of the EU
in defense and security. Earlier, on September 23, 2008, addressing
the 63rd Session of the UN General Assembly, he proposed building a
common economic space across the continent, which would unite
Russia and Europe. This idea, which was first expressed by Charles
de Gaulle, could help determine Russia’s path and destiny within
the framework of the kindred European civilization.

The gradual construction of a strategic alliance between Russia
and the European Union must be a general strategic benchmark for
Russia, which could be mentioned in the new basic agreement with
the EU – provided, of course, that the EU duly reciprocate and that
the present political situation becomes less acute. Such an
alliance could be based on a pan-European security system, firm
mutual obligations in the sphere of economic cooperation, including
the energy sector, and the harmonization of Russian and EU
legislations – initially, in the field of economic, trade,
financial and investment regulation. It would be advisable that
Russian and EU observers participate in the working out of relevant
regulations in EU and Russian legislative bodies.

These efforts may meet opposition from Washington, which may
continue for as long as the U.S. views or deliberately portrays
Russia as a potential threat. The establishment of truly partner
relations between Russia and the European Union could help allay
Washington’s “fears” concerning Russia.

The top priority task for Russia now is consistently overcoming
the bugbear image, made of Russia for Europe, and not sliding into
remilitarization in response to the Georgian provocation, which
would be to U.S. liking. It is exceptionally important that the
resumption of negotiations between Russia and the EU be preceded by
a large-scale and continuous publicity campaign – especially in the
Western mass media and though diplomatic channels – aimed at
building a peaceful image of Russia in foreign policy and foreign
trade.

What image of Russia could be attractive to Europeans? I think
it is the image of a reliable shield for European civilizational
humanitarian values, the image of a buffer that has for centuries
protected Europe against Eastern waves of aggressive despotism and
authoritarianism, and the image of a solid supplier of raw
materials, energy and (potentially) food. This true image of Russia
must be consistently brought home to every European and
American.

There are essential differences in Russia’s and the European
Union’s views on the parameters and the format of political and
economic problems that need to be agreed in a new strategic
partnership agreement. The anti-Russian position of some of new EU
members stands in the way of achieving mutually advantageous
Russian-EU accords on a new agreement. In addition, the EU’s
negotiability has been undermined by the need to achieve consensus
among all the 27 member states. In these circumstances, the “common
denominator” attainable today for inclusion in the new agreement
can only be minimal, and codifying this minimum in the agreement
would be counterproductive for Russia.

The above suggests that Russia is not interested in speeding up
work on specific provisions for a new agreement with the EU. One of
the reasons is that the 1994 Agreement – throughout its period of
validity – showed that it was adequate to the development of mutual
cooperation, even though its parameters and terms were not ideal.
In addition, the possibility of annual renewal of the agreement
lets the parties maintain for some time a sufficient level of legal
groundwork for their cooperation.

Regrettably, international politics now ignores the principle of
“cooperation among states,” proclaimed in the Helsinki Final Act,
which provides for promoting mutual understanding, confidence, and
friendly and good-neighborly relations. This principle is as
binding as, for example, the principle of territorial
integrity.

Meanwhile, the U.S. ambassador in Budapest advises the Hungarian
authorities to suspend negotiations with Moscow on the construction
of the South Stream gas pipeline across Hungary. Simultaneously,
the U.S. ambassador in another EU country, Sweden, tries to
persuade the Swedes to prevent the construction of the Nord Stream
gas pipeline across the Baltic Sea. Such actions are not only a
direct embodiment of the undisguised policy of containing Russia
but also are a gross violation of international law, including the
Helsinki Accords. They undermine the Russian-EU partnership and
actually are nothing else but non-military aggression.

In negotiations on a new agreement with the EU (as well as in
cooperation with China and at the United Nations), Russia should
put forward and uphold a proposal for denouncing and renouncing the
policy of containment in all its forms as a threat to peace and as
an impediment to the development of friendly and good-neighborly
relations between states, and for prohibiting both military and
non-military aggression.