10.08.2004
Rethinking Russia-EU Relations
№3 2004 July/September

The tenth anniversary of the Partnership and Cooperation
Agreement, signed between Russia and the European Union on the
island of Corfu, Greece, was celebrated this June. This document,
which reflects the Parties’ ideas and expectations of ten years
ago, remains the basis of Russia-EU relations. The PCA was ratified
in 1997 for an initial period of ten years. The Agreement’s future
is defined in Article 106: “The Agreement shall be automatically
renewed year by year provided that neither Party gives the other
Party written notice of denunciation of the Agreement at least six
months before it expires.”

It is highly unlikely that either Party will give such notice to
the other before 2007. Therefore, there are no grounds to worry
about the PCA’s future, and when the time comes the Agreement will
be automatically renewed. Yet, the content and effectiveness of the
Agreement raise many questions.
Over the last ten years, Russia and the European Union, not to
mention the entire world, have seen so many dramatic changes that
the PCA has ceased to be an adequate political and legal foundation
for Russia-EU relations. Thus, there is no use extending this
document: with the passage of time, it will depart more and more
from reality, from the content and forms of relations between the
partners. The legal basis for these relations must be completely
renewed.
First of all, the new document should receive a new name – a
Strategic Partnership Agreement, for example, between the European
Union and the Russian Federation.

The first argument in favor of a new agreement stems from the
analysis of the PCA. The Agreement conformed to the initial phase
in Russia-EU relations, which was the establishment of their
partnership and cooperation. This phase has passed. As it stands,
the PCA does not serve the task of consolidating and further
developing these relations on the basis of a strategic partnership.
The new stage in the development of Russia-EU relations needs a new
legal foundation.

A more important argument is that a new agreement would give a
powerful political impetus to Russia-EU cooperation. The EU itself
took a similar approach when it developed from one stage to
another, each based on a new agreement: the European Coal and Steel
Community (1951), the treaties on the establishment of the European
Atomic Energy Community and the European Economic Community (1957),
the Single European Act (1986), and the EU treaties of Maastricht,
Amsterdam and Nice (1992, 1997, 2000). This experience has proven
instructive as each time the European integration faces a crisis,
the participating nations reassess the situation and amend their
integration strategies.

A similar situation has arisen in relations between Russia and
the EU. On the one hand, over the last three years it has entered a
stage of practical cooperation. On the other hand, whenever the
partners proceed from long-term goals and projects to urgent tasks
requiring immediate decisions, their embraces give way to a
standoff. Moscow and Brussels are bogged down in debates on vexed
questions, while frequently engaged in mutual accusations. The
range of differences between Russia and the EU is very wide – from
accusing each other of trade protectionism, to mutually exclusive
approaches on the settlement of conflicts in the former Soviet
Union (Moldova and Georgia, not to mention Chechnya). The Parties
are engaged in fierce bargaining on these issues, and mutually
acceptable compromise solutions are achieved by the sweat of their
brow.

It must have been the sentiments of dissatisfaction and concern
that were behind the decision of the EU December 2003 summit to ask
the Council of the European Union and the European Commission to
assess all aspects of EU-Russia relations, and make proposals for
cementing a strategic partnership and ensuring adherence to the
values inherent to it. The assessments and recommendations were
proposed in two documents – a Communication from the Commission to
the Council and the European Parliament on relations with Russia
(February 9, 2004), and Conclusions of the Council of the European
Union on relations with Russia (February 23, 2004). The documents
reiterate that the EU views Russia as its strategic partner and
that it is ready to create four ‘common spaces’ with it. The
Parties’ next move could be establishing a High Level Group,
together with special expert groups, with a view to drafting a new
fundamental document – a Strategic Partnership Agreement.

So, the validity and expediency of a decision to replace the PCA
with a new agreement seems obvious. However, there are lingering
doubts that a new agreement will materialize for several
reasons.

First of all, the partners are not prepared for such an idea.
The documents of the European Commission and the Council of the
European Union name the PCA as the basis of the Parties’
interaction. And although both documents are intended for the
medium term, they do not raise the issue of the PCA’s future after
it expires. Nor are there any signs that this issue is being
discussed in the Russian government.

Another reason is the unfavorable climate in Russia-EU
relations. The situation is not critical (as European and Russian
media sometimes assert), yet the Parties’ mutual discontent and
tensions in their relations are obvious. The atmosphere could
improve through a major success, such as Russia’s accession to the
World Trade Organization on mutually acceptable terms. An even more
attractive idea, perhaps, would be a ‘package’ solution of a range
of outstanding problems through mutual concessions. The
aforementioned documents, adopted at the first meeting of the
Permanent Partnership Council, can be viewed as a step in this
direction. So, removing obstructions to the development of
cooperation is task number one.

Yet, this is not enough. Both Parties have grounds for not
rushing to assume more challenging commitments than those stemming
from the PCA. These are long-term brakes, so to speak.

Let’s start with Russia. Its first ‘brake’ involves the
unresolved dilemma of choosing a strategic choice. President
Vladimir Putin has singled out two priority fields in Russia’s
foreign policy – strategic partnership with the EU, and the
restoration of Russia’s influence in the post-Soviet space,
specifically through the establishment of economic and political
blocs under Russia’s leadership. The latest such move was the
Agreement on the Creation of a Common Economic Space, signed by the
presidents of Belarus, Kazakhstan, the Russian Federation and
Ukraine on September 19, 2003. There has been no official statement
yet as to how these two fields can be combined. In principle, they
can and must be combined, but this requires a finer tuning of the
foreign-policy instruments than presently displayed by Moscow.

Meanwhile, it is widely believed among Russia’s political,
business and intellectual circles that a policy toward integration
with other members of the Commonwealth of Independent States (CIS)
is incompatible with a policy toward a strategic partnership with
the EU, toward integration into the Common European Economic Space
and close coordination of foreign-policy and security activities.
These circles will hardly cause the Russian president to give up
his European policy, yet their efforts may prove enough for sinking
the idea of concluding a new PCA.

Another ‘brake’ is the lack of clarity about Russia’s future
gains and losses once the Common European Economic Space (CEES) is
created. These gains and losses have never been calculated;
moreover, calculations of this kind would be very approximate and
unreliable, since it will take Russia 15 to 20 years to prepare for
CEES membership, that is, provided economic reforms are conducted
consistently and actively, and economic growth rates remain stable
and high. In addition to the economic aspects, there is no real
clarity on legal aspects, as well.

Europe already has the European Economic Area which comprises
the EU states plus Norway, Iceland and Liechtenstein. In the next
ten years, it is expected to include another seven or eight
countries. This space functions on the basis of acquis
communautaire, as the entire body of European laws is known. The
creation of the CEES will mean Russia’s actual integration into the
European economic space, and there is no doubt that the EU will not
change CEES standards for Russia’s sake. At the same time, even
Russian proponents of the ‘European choice,’ together with its
accession to the CEES, object to Russia’s full adoption of acquis
communautaire.

The third ‘brake’ is the obvious wish of the European Union to
increase its influence on the European and Transcaucasian members
of the CIS, together with its negative attitude to any integration
initiatives of Russia in the post-Soviet space – which some Western
European countries interpret as a revival of Russia’s imperial
ambitions. A CEES that includes Russia, but not Ukraine and
Belarus, is an economic and political absurdity. Furthermore, it
would probably be impossible to create a CEES in such a reduced
format. This is why the future of the CEES largely depends on
whether or not Russia and the EU are able to find common ground in
their approaches to relations with the CIS European members.

The EU has barriers of its own, too. During the first few years
after the PCA was concluded, its limited implementation was wholly
attributed to the crisis in Russia. Now it has turned out that the
EU’s cooperation potential is limited, too. When the EU made a
series of strategic decisions in 1992-2000, it underestimated the
difficulty of simultaneously implementing them. Actually, it is
difficult to say in which area of strategic concern things are
better now. Plans for the entry of Britain, Sweden and Denmark into
the EU’s Economic and Monetary Union were ruined by the results of
a referendum in Sweden, in which a majority of the population said
“no” to their government’s proposal for introducing the euro in
place of the Swedish crown. The outcome of the Swedish referendum
caused London to postpone its plans to enter into the EMU. A
terrorist act carried out by Islamic extremists in Spain put into
question the future of the Schengen zone, not to mention a common
space of freedom, security and justice, now being created in the
EU.

The rift within the EU which has been caused by the different
positions of EU member states on the U.S. military actions against
Iraq shows how far away the EU is from adopting common foreign and
defense policies. A program for building within a decade, “the
world’s most competitive and sustainable dynamic knowledge-based
economy,” a goal adopted at the EU March 2000 Lisbon summit, will
obviously not be fulfilled within the planned period of time, and
the economies of a majority of the EU member states, most notably
Germany and France, are overcoming a period of stagnation with
great difficulty.

Finally, the last but not the least important factor: the
transformation of the EU-15 into EU-25 on May 1, 2004, has opened a
new chapter in the EU. Its main efforts will be focused on
completing the expansion process (presently, there are three more
official and five potential candidates) and adapting new members
into the EU’s single domestic market. This will also include the
Economic and Monetary Union, legislation, and decision-making and
enforcement mechanisms. These efforts will take at least 10 to 15
years to complete.

Considering the scope of political and economic difficulties, as
well as the amount of spending involved in the above processes, the
EU leadership may delay to replace the present PCA with a new
agreement with Russia that would provide for the Parties’ broader
mutual commitments. Another argument for the postponement may be
the increased difficulty of establishing a common approach of the
25 EU member states in its relations with Russia. Each individual
EU state has different interests in relations with Russia; the
state of these relations differs with each EU state. The
aforementioned Communication from the Commission to the Council and
the European Parliament on relations with Russia stresses the need
for a “more coordinated EU policy” toward the European Union’s
largest eastern neighbor. Finally, it is not ruled out that the
opposition to the PCA’s renewal would come from the EU members
which, like any other bureaucratic structure, tends to accumulate a
certain degree of inertia.

Besides the more internal reasons, which will unlikely be made
public, the European Union may have other arguments against
revising the PCA, namely its critical assessment of some tendencies
in Russia’s development – the growth of authoritarianism, human
rights violations, encroachments on the freedom of mass media, etc.
If Russia succeeds in maintaining its present economic growth
rates, these tendencies will not stop the EU countries from
boosting their trade with Russia or making investment in this
country. The signing of a new PCA would be, above all, a political
act testifying to a higher level of mutual trust and concord
between Russia and the EU. However, if the above trends in Russia
intensify, while evoking a negative public reaction in the EU
countries, their governments will not agree to greater cooperation.
Therefore, progress in building a rule-of-law state, consolidating
democratic institutions, developing a civil society and ensuring
human rights would be the best confirmation of Russia’s desire to
build a strategic partnership with the EU. As the ancient Romans
said, this is a sine qua non – an indispensable condition.

On the whole, Russia’s and the EU’s approaches to mutual
cooperation have many nuances determined by domestic difficulties,
persisting mutual mistrust and the unpredictable international
situation. So the final choice has not yet been made. A decision to
begin work on a Strategic Partnership Agreement, and create ‘common
spaces’ between Russia and the EU, largely depends on whether or
not the Parties display the political will.

Despite the abovementioned ‘brakes,’ the arguments for
concluding such an agreement are much weightier. Although these
arguments are well known, it would be helpful to remind ourselves
of them again here.

1. The growing economic interdependence of Russia and the EU.
Russia does not have an alternative trading partner that would be
able to replace the integrated Europe. The EU countries have no
alternative to Russian fuel supplies, particularly natural gas.

2. The mutual interest of Russia and the EU in social and
political stability. In contemporary conditions, Russia and the EU,
which are immediate neighbors, are much like communicating vessels.
In other words, neither the Schengen agreement nor any other
barriers can stop the virus of social disease, ethnic conflict,
religious intolerance, crime and so forth spreading between their
borders. Any efforts to counter these threats will be effective
only if Russia and the EU establish very close cooperation.

3. The Parties’ common interest in ensuring security in Europe
and adjacent regions. Security must cover all aspects, including
the aforementioned social and political imperatives, the supply of
energy and other resources. These security measures must also cover
environmental protection, crisis management, not to mention the
struggle against the new evil of the 21st century – international
terrorism, which is threatening to plunge the entire international
community into chaos.

4. Russia and the EU share similar positions on major issues
pertaining to the formation of world law and order. This includes
the need for a stable system of international relations, crisis
management methods, not to mention the UN’s role in these
efforts.

The influence of these factors on Russia-EU relations will keep
growing. Actually, Russia and the EU member states have no
alternative to their strategic partnership, but this does not
necessarily mean that they cannot have other strategic partners.
The peculiarity of the international situation that has taken shape
after the breakup of the bipolar system is that each large and
independent actor on the international stage has, or wishes to
have, several strategic partners. Russia and the EU have such
partners. Now the Parties should display their political will by
establishing a strategic partnership between them, and a new
Russia-EU agreement would be a convincing demonstration of such a
will. As the first step toward such a decision, the Parties could
set up a joint expert group to make an in-depth analysis of how the
present PCA is being fulfilled, and to compare the PCA’s content
with the accumulated experience of cooperation and challenges of
the new century.

Structurally, a new agreement could be structured much the same
as the present PCA, with a Preamble, a Cooperation Program, as well
as Institutional, General and Final Provisions.

1. The new Preamble would contain all the provisions from the
previous one that pertain to the Parties’ commitment to promote
international peace and security, to cooperate in the framework of
the United Nations and the Conference on Security and Cooperation
in Europe (CSCE), to implement all principles and provisions
contained in the Final Act and other documents of the CSCE, to
respect human rights, and to act in accordance with the principles
of a market economy and democracy. Naturally, the matter at issue
is not textual but conceptual identity, and the preservation of the
PCA’s spirit rather than letter.

All other provisions of the new agreement must be formulated
anew, taking into consideration all the changes that have taken
place in Russia, Europe and the world, as well as the accumulated
experience of Russia-EU cooperation. The new Preamble must include
the following crucial provisions, stating:
– that Russia and the EU are establishing a strategic
partnership;
– that the goals of this strategic partnership include the creation
of four common spaces;
– that the creation of a new system of international relations
requires the efforts of all the states acting in the framework of
the UN, which must retain its role as the main integrator of these
efforts;
– that one of the main goals of the Parties’ cooperation is
countering all manifestations of racism, chauvinism and xenophobia,
including all kinds of extremism, above all in Europe, no matter
what ideological or religious disguise they may have;
– that Russia is a country with a market economy;
– that trade relations between the EU and Russia are based on the
principles and standards of the World Trade Organization (which
Russia will have joined by that time).

2. The Program for Russia-EU Cooperation would be better set out
in four sections devoted to the construction of the four common
spaces. This will require regrouping specific areas of cooperation,
and as a result, the program would look more integral and
harmonious.

A section devoted to the creation of the CEES should cover all
the areas of economic cooperation, from trade and customs to the
harmonization of economic legislation and the coordination of
economic policies. It should also specify joint efforts to
liberalize the movement of goods, services, capital and
persons.

Another section, which could be named Common Space of Freedom,
Security and Justice, would include areas of cooperation aimed at
ensuring free movement of persons and their rights on the
territories of the EU countries and Russia. This section would also
cover issues pertaining to the application of the Schengen visa
regime and the readmission agreement, as well as transition to a
visa-free regime and the free movement of persons. The same section
would cover cooperation in combating transborder crime, conducted
under a recent agreement between Russia and the European Law
Enforcement Organisation (Europol). It is more than probable that
this section will include one more major area – cooperation in
justice, specifically in such issues as the improvement of judicial
legislation, the state of penitentiary institutions, and so on.

Finally, this section should include cooperation in developing
public ties. This area of cooperation and a transition to the free
movement of persons are interrelated: the freedom of movement,
settlement and occupation is not an end in itself, but it helps to
enhance labor efficiency and promotes better self-realization,
people-to-people contacts, rapprochement between nations and, in
the long run, the formation of a European identity.

The section Common Space of Cooperation in the Field of External
Security would formulate a program for Russia-EU interaction in
this field, specifying its main areas (the UN and general issues
concerning the new world law and order; security and cooperation in
Europe; regional conflicts and crisis management; peacemaking,
rescue and humanitarian operations), as well as methods and
mechanisms. The same section would be devoted to the struggle
against international terrorism.

The section Common Space of Research, Education and Culture
would take into consideration the experience gained by the EU and
Russia in these fields over the last decade.

Apart from the four sections, the new agreement may retain the
PCA’s introduction but under a different name: Common Principles
and Goals. Consequently, it would be supplemented with new
provisions.

3. The final section of the new agreement. Its first part,
concerning the institutional system of Russia-EU cooperation, would
be altered the most, because this system has changed since the PCA
entered into force. In particular, the Cooperation Council should
be changed for the Permanent Partnership Council. Furthermore, the
functions of all joint institutions must be formulated to a higher
degree. The new agreement should, perhaps, provide for the
establishment of an EU-Russia Public Forum which could become a
platform for regular meetings of the nongovernmental organizations.
This would provide the venue for discussing vital issues of
cooperation and working out recommendations for corresponding
decision-making institutions of Russia and the European Union.