08.08.2007
Russia and the EU to Negotiate a New Cooperation Agreement
№3 2007 July/September

The Partnership and Cooperation
Agreement (PCA), an international legal document that sets out the
basic principles of relations between Russia and the European
Union, was signed on the Greek Island of Corfu in 1994 and entered
into force on December 1, 1997. The agreement was signed for ten
years. Therefore, the PCA expires at the end of this year, which
brings up the question of the future legal framework for Russia’s
relations with its main trade and economic partner.

CAMPAIGN PLAN

Russia and the EU were faced with three
possible options – extending the 1997 PCA, “modernizing” it or
drafting a basically new agreement – and they chose the latter. But
if we discard PR declarations to the effect that the document
should be “concise,” “balanced,” and “addressed to the future,” it
becomes evident that Moscow and Brussels have basically different
positions.

Differences start with the very title
(status) of the document. Russia wants it to be a treaty. In the
hierarchy of international law documents, ’treaty’ stands a notch
above ’agreement,’ and Moscow believes that the signing of a
document with a higher status will in and of itself reflect the
priority, long-term and strategic importance that both sides attach
to each other. By contrast, Brussels acts on the premise that EU
tradition is that treaties are only concluded between member
countries (the Treaty of Rome, the Maastricht Treaty, the Nice
Treaty, etc.). In other words, EU member states only regard each
other as priority, strategic partners and sign agreements with the
rest of the world.

Moscow believes the future basic
document should be of a framework kind, proposing that the sides
confine themselves to declaring that they regard each other as
strategic partners on the international arena, committed to the
rules and regulations of the World Trade Organization (which Russia
is about to join), and striving to develop privileged trade and
economic relations (’WTO-plus’ or a free trade zone). On human
rights and freedoms, they should also declare their commitment to
general democratic values (which are still interpreted
differently), the rule of law, and facilitation of people-to-people
contacts (including the gradual lifting and abolition of the visa
regime). Later, a basic treaty would be followed up with special
“branch” agreements regulating specific aspects of political, trade
and economic, humanitarian and other relations.

The advantage of this arrangement is
primarily the relative ease and simplicity of its implementation.
It is far easier to reach agreement on a framework 10-15 page
document than on a comprehensive agreement (the current PCA with
appendices is more than 100 pages long). The same applies to branch
agreements: it is easier to consider, for example, transport
matters separately than by mixing them with trade, political and
other issues. This also helps avoid numerous links and “horse
trading,” as has often been the case in the past.

Meanwhile, Brussels does not intend to
abandon the tactics of linkages, which it has often found to be
beneficial. This is why, while paying lip service to the idea of
signing a framework document, EU bureaucrats are already pushing to
include principal demands to Russia in the main document, not
branch agreements. At the same time, human rights, media freedoms,
civil society and ’democratic values’ will most likely be used as
bargaining chips on economic matters. EU officials have long been
using such tactics with respect to China, Turkmenistan, Kazakhstan,
Azerbaijan, and countries of the Middle East and North Africa:
democracy is important, but the EU’s economic interests come
first.

POSITIONS

Paradoxically, neither side is, in
effect, ready for negotiations. The differences existing between
Russia and the EU are attributed to their lack of understanding as
to exactly what they want from each other, especially in the long
term.

The EU is still in a state of
confusion, compounded by the unclear situation in its principal
member states: a change of government in France and the UK, weak
government coalitions in Italy and Poland, etc. In this situation,
the EU leadership is not prepared to rack its brains over what to
do with Russia, and will choose to hand over the Russian dossier to
EU bureaucrats to revisit it later, if and when the situation
within the EU improves. This setup is even more acceptable to the
European Commission, which will have more freedom of action to
concentrate on obtaining trade and economic concessions from
Moscow.

The EC-formulated mandate is
unremarkable in its strategic thinking. It has been reduced to the
demands that Russia grant access to its hydrocarbon deposits and
transport infrastructure, open its domestic market to goods and
services from the EU (under the slogan of ’WTO plus’ or free trade
zone), and harmonize its laws with EU legislation, regulations and
standards. In democracy-building and human rights, it should submit
to monitoring by EU institutions and follow their
recommendations.

The implementation of this “maximum
program” by the EC would provide an answer to the question about
Russia’s place in the EU’s “system of coordinates” in the long
term: energy appendix, sales market, and political satellite. But
hardly anyone in Brussels expects this approach to produce a 100
percent result. Therefore, in reality the EU is only preparing to
wrest trade, economic and political concessions out of Russia. To
Brussels, there is no question about working out a new
“partnership” formula.

But what is the Russian view? On the
one hand, analysts, experts and certain politicians in Russia have
moved a little further in this respect than their EU colleagues
have. On the other hand, apart from an occasional news conference,
roundtable or TV panel, the Russian public is not involved in this
discussion. With a few exceptions, representatives of government
agencies and departments concerned are also not involved.
Meanwhile, without the participation of officials who possess
complete information and extensive experience in interaction with
the EU, there can be little hope that this brain storming will
produce any meaningful result.

Lacking a coherent political and
philosophical concept, the long-term interests of the Russian
public with respect to the EU have to be gauged through the daily,
routine needs of the people – the possibility, first, for visa-free
travel to EU countries, and to study or work there, and second,
promote Russian goods and services on the EU market, plus see some
letup in attacks on Russia over its human rights record.

Visa facilitation seems to be the most
realistic proposition. An agreement on mutual simplification of the
visa procedure for certain categories of Russian and EU citizens is
already being applied. This means that the next step could be the
extension of a simplified visa regime for tourists and individuals.
However, Russia should be prepared to assume appropriate
commitments: not simply to provide similar treatment to citizens of
EU countries, but also strictly adhere to the requirements inherent
in freedom of movement under EU law (readmission [of illegal
immigrants], cooperation between law enforcement, judiciary, border
and customs agencies, etc.).

Furthermore, there should be no
particular impediments with respect to freedom of choosing the
place of study, especially in the context of Russia’s participation
in the Bologna process. Here, it is essential to mention the
problem of mutual recognition of qualifications, diplomas, and
certificates of education, as well as academic degrees, which will
require additional efforts, since it is related to employment
opportunities, among other things.

The free movement of labor is a more
complex problem. It will not be easy to remove obstacles to the
employment of Russians in EU countries, since unlike immigrants
from the Third World, Russians will start claiming the same labor
niches as locals. Although the situation can also change here as
negative demographic trends worsen both in the EU and in
Russia.

As for Russians’ economic interests in
the EU, some of them could be implemented within the WTO framework.
However, this factor must not be overestimated: the WTO has been
unable to resolve any serious trade contradictions or disputes yet.
Nevertheless, the sheer fact that a particular product or service
originates from a WTO member state can protect this state against
discrimination – something that is still being practiced against
Russian business and capital on the EU market. All other goals can
be attained by signing special branch agreements as appendices to a
basic Russia-EU document. Nor should the idea of creating a
Russian-EU free trade zone (in 10 to 15 years) be abandoned a
priori, although this will require additional study as to the
implications of this move for domestic business and the national
economy as a whole.

Finally, concerning the desire to see
an end to the constant criticism and lecturing on democracy from
European institutions, one thing is clear: Russia will not be able
to completely free itself from this. Yet it should set the goal of
strengthening to such a degree (not only militarily, politically
and economically, but also democratically) that these attacks could
be simply ignored, as is done, for example, by the U.S. with
respect to a flow of criticism from Brussels. As soon as Russia
attains such a level of development (and this, to reiterate, should
include the strengthening of democratic institutions, civil
society, the rule of law and an independent judiciary), accusations
by EU or EC officials will no longer attract media
attention.

The ideological vacuum that exists both
in Moscow and in Brussels on the strategy of Russian-European
relations did not appear yesterday. It came to a head with the
concept of four ’common spaces,’ which was put forward by France,
taken up and distorted by the EU, and ended in the adoption of
incoherent ’action plans.’ These included a chaotic array of
declarations, wishful thinking and “homework” addressed primarily
to Russia. For a while, the work on action plans and their adoption
filled the pause in these relations, creating (mainly for the
authors themselves) an illusion of progress. The problem, however,
is that these plans are just not good enough as a conceptual
platform for a future basic Russia-EU document.

Neither Russia nor the EU has a
coherent idea about the place that they should have in their
respective “systems of coordinates.” So both sides will probably
not talk about the strategic aspects of their relations but will
engage in horse trading, and lobbying for specific trade, economic
and political interests. Its outcome will largely hinge on the
intellectual, personnel, and administrative resources of the
negotiating teams, their coherence, and professionalism.

ON THE FRONT LINE

Unlike the European Comission, whose
bureaucratic machine is always “on alert” (the EC is constantly
negotiating on some matter or other both with EU countries and with
the outside world), Moscow has yet to start working. Not only is
there no concept for future negotiations or understanding of what
they should produce, but there is not even a tentative make up of
the delegation, a “short list” of its key members. There are no
draft guidelines, which will need to be harmonized with all
agencies and departments concerned (including federal agencies and
services, there are about 20) and approved by the Russian
government.

Generally, Russia is ill equipped to
negotiate on matters that fall within the scope of several
ministries and agencies at once. There are plenty of such examples,
while concessions and mistakes made in the course of WTO accession
talks are some of the most glaring ones.

Let us start with figures. Only
officials (bureaucrats) participate in the negotiating process on
the Russian side. There are not more than 30 people directly
concerned with EU matters at all Russian federal agencies and
departments, whereas in the EU (the EC, the EU Secretariat, the
European Parliament, the European Court, the European Space Agency,
etc.), there are at least 250 Russia specialists or experts on
basic points of a common agenda.

True, we should not ignore the Russian
Mission to the European Communities in Brussels, but unfortunately,
despite its relatively large staff, it can do nothing to
substantially change the balance of forces. Russian Prime Minister
Mikhail Fradkov, when he was head of this diplomatic mission
(2003-2004), was instrumental in securing a special presidential
decree effectively granting it the status of a ’field interagency
commission.’ Under this decree, the mission’s staff was to be
substantially enlarged by including responsible representatives of
government agencies authorized to decide on the majority of matters
on the Russia-EU agenda while dealing with other matters by
accessing the heads of respective federal power agencies in Moscow.
Unfortunately, the incumbent prime minister did not get around to
translating this decision into reality: as a result, only a small
proportion of government agencies sent their representatives to
Brussels, but on a rather low level and with virtually no decision
making powers.

EU institutions have a staff of over
100,000 employees, i.e., at least 10 times larger than the staff of
Russian agencies and departments concerned. Furthermore, unlike
their Russian counterparts, EU bureaucrats receive good wages, are
provided with state of the art office equipment, have access to
broad databases and have no problems with funding when they need to
travel abroad. By contrast, in Russia, delegations are often formed
without key experts in the field since the agencies for which they
work cannot afford to pay for their trips.

Nor should we forget the substantial
differences in outsourcing. The EC has not only an incomparably
larger budget to finance various R&D projects, but also a
diversified network of institutions, associations, and other think
tanks that are ready at any moment to work on virtually any subject
for upcoming negotiations.

Needless to say, such centers also
exist in Russia, albeit not very many. The Russian Academy of
Sciences Institute of Europe is by far the most influential and
authoritative one on the list. The problem, however, is that
Russian research centers have to work, first, with considerably
less financial resources, second, in separation from the practical
activity conducted by the respective agencies and departments, and
without adequate informational support. The EC not only commissions
and provides ample compensation for R&D projects, but also uses
their results in its activity – the exact opposite of what is
happening in Russia.

Finally, it should be taken into
account that standing behind the negotiating delegation are the
bureaucratic machines of 27 EU countries. They will not be directly
involved in negotiations, but will indirectly provide Brussels with
intellectual and information support, as well as exert pressure on
Moscow over specific elements of a future document. The Russian
side will have to divert a part of its rather limited resources for
this purpose.

SHAPE UP OR SHIP OUT

Of course, there are still some real
professionals, but they are very few and far between. Therefore, it
is essential to use them as effectively as possible.

As mentioned earlier, at the upcoming
negotiations, Moscow and Brussels will not deal with the strategic
aspects of their relations, but will engage in horse trading, and
push for their respective trade, economic and political interests.
This should be the main guideline in the formation of the Russian
delegation – at least its core (certain members can change
depending on the specific issues that are addressed). Following is
a tentative profile of experts that could fulfill this
mission.

First, there is a
pressing need for “generators of ideas,” ready to put forward
specific, realistic proposals both with respect to the structure
and substance of the future basic document. Unfortunately, there
are almost no such people left in Russian government agencies and
departments that are responsible and capable not only of advancing
fresh, innovative ideas, but also defending them before internal
and external opponents.

Meanwhile, the success of the upcoming
negotiations (from Russia’s perspective) will largely depend on who
will be the first to submit the draft document for discussion. So
far it looks like the EC will do it first, and its draft will be
based on the mandate that it has already prepared. It is based on
unilateral demands to Russia in the energy, trade, economic,
regulatory and legislative sectors, as well as on democracy and
human rights. If this scenario is played out, the subsequent
negotiating process will be based on a draft that is absolutely
unacceptable to the Russian side.

It is extremely difficult to present a
counter draft, especially with delays; and given the EC’s superior
administrative resources, it is virtually impossible. This means
that the Russian delegation would have to beat off the EC’s
requirements and statements, trying to replace them by its own ones
and “pegging in” its own vision of the document on the
whole.

Although Moscow and Brussels have
generally agreed on a bilateral structure of the document (a short
framework treaty or agreement that will then be followed up with
cooperation agreements in specific areas), their approaches are
basically different. The EC will work to include its principal
demands in the energy, economic and trade sectors in the main
document, while Russia’s counter demands will be put off – to be
recorded in branch agreements. For its part, Moscow should stand
firm that the basic document stay confined to general principles
and declarations with no links or swaps (energy-for-democracy,
etc.).

Second, experienced,
effective negotiators will be needed – experts and specialists who
have dealt with the EC, who know its structure, scope of activity,
mechanisms of operation, and its procedure for making decisions.
There are also considerable problems here, even at the Foreign
Ministry, not to mention other government agencies and departments.
Even those officials who have done business with the EU and the EC
for more than just one year typically make at least two serious
mistakes. The first is that the EC’s logic of action is assessed as
though it was a state upholding its national interests. But this is
not the case: EC bureaucrats act exclusively in their own
interests, the interests of European integration as a whole, and
are ready to make decisions infringing on the interests of
individual member countries, but helping increase Brussels’ weight
with respect to EU capitals.

The second common mistake made by
Russian officials negotiating with the EC is that they allow it to
play the game of “a third missing party:” in refusing to adopt a
particular proposal, Brussels cites the position of “certain member
countries” (who are never identified), who in turn cite the EC’s
position, express concern, and promise to do something, but never
do.

Third, the negotiating
team should include very good lawyers specializing in various
spheres of international law – from business law to EU law. The
situation here seems to be a little better: there are such
specialists in Moscow, and not only at the Foreign
Ministry.

Fourth, there is also
a need for industry experts, regardless of how successful the
Russian delegation’s proposals on the future Russia-EU framework
document may be. This document will need to make at least some
reference to priorities of bilateral cooperation – e.g., trade,
industry, transport, science, communications, finances, etc. There
should be no problem with such experts.

Fifth, it is necessary
to exercise good judgment in selecting the head of the delegation
who should know very well what the EU is all about, have personal
experience in dealing with Brussels, understand Russia’s political
and economic interests in Europe, and have a high status and direct
access to the top decision-making level. Otherwise he or she will
be under constant pressure (often mutually exclusive) from a horde
of officials at the Executive Office of the Russian president, the
government, and various government agencies and departments. There
is a narrow choice here, and given that the delegation chief will
need considerable courage and push, the selection of an appropriate
candidate becomes a problem.

Sixth, it is
important, right from the start (preparation, communication and
approval of the negotiating mandate), to ensure effective
coordination both within the delegation and between the agencies
and departments concerned. In the present situation in Russia, this
mission is all but impossible to accomplish. Prior to the spring
2004 administrative reform, the coordination functions were
performed by a governmental commission on cooperation with the EU,
led by a deputy prime minister. Its performance left much to be
desired (key agencies often bypassed or ignored its decisions), but
it provided a convenient platform for sharing information and
opinions on matters of interaction with the EU at a very high
level.

Three years have passed since the
commission was abolished, and the situation with interagency
coordination, especially on the EU, has become simply deplorable.
Before these comprehensive and complex negotiations with Brussels
begin, such a body should be restored, to be led by, at least, a
deputy prime minister.

Seventh, special
attention should be given to drawing up clear guidelines and
ensuring regular reporting back on their implementation. Otherwise
certain agencies and departments, or their individual
representatives, will continue to act separately and autonomously,
issuing contradictory signals to the other side and “coordinating”
some decisions – only to present members of the delegation and the
Russian side as a whole with a fait accompli.

This leads to the last, but not least,
requirement – transparency. Complete and reliable information about
the negotiating process should be provided not only to agencies and
departments concerned, but also to the Executive Office of the
Russian president, the State Duma, the expert community and – even
in a somewhat reduced form – to the general public. This is the
only way of securing against mistakes and miscalculations, taking
all interests (including those of domestic business) into account
and expanding the arsenal of arguments in defense of Russia’s
negotiating position.

Only this will help avoid the
unjustified concessions which are often made by Russian negotiators
and which often have serious consequences for national interests,
including economic interests, with no one taking responsibility for
such decisions. The risk of such a lamentable practice continuing
is especially high today with the upcoming parliamentary and
presidential elections in Russia.

Russia’s long-term economic and
political interests must take precedence over the plans and schemes
of political technologists and spin doctors.