28 Jun Milestone: The EU Signs Association Agreements with Ukraine, Moldova, and Georgia
On Friday, Ukraine, Moldova, and Georgia signed the Association Agreements with the European Union that have been at the center of so much controversy among Russia, the EU, and these states. Preventing Ukraine, Moldova and Georgia from signing these agreements had become an important foreign policy goal for Moscow (see, for example: 1, 2, 3) after significant pressure, and perhaps some incentives, from Moscow, former Ukrainian President Yanukovich’s decided at the last minute not to sign the agreement at the EU’s summit in Vilnius in November precipitated the demonstrations that began in Kiev. Those were followed by Yanukovich fleeing, Russia’s intervention in and annexation of Crimea, and the ongoing tensions over the future of Ukraine. Moldova and Georgia have also faced threats of economic and/or energy embargoes as well as the ongoing Russia-backed separatist issues in Transnistria, South Ossetia, and Abkhazia.
After the diplomatic disputes and the pipeline politics, the secessionist movements and Russian military incursions, Maidan Square and Crimean annexation, the signing of these treaties are a significant milestone, and hopefully a turning point. Ukraine, Moldova, and Georgia are committing themselves to a path of greater economic and normative integration with the EU. The EU is committing itself to allowing market access to the EU; more generally, the EU will likely become increasingly involved the in the internal policies of these countries, although they are not member states.
What is clear is that this is a significant moment, President Poroshenko of Ukraine called it the most important moment for his country since the dissolution of the Soviet Union. What is not yet clear is how relations with Russia will evolve from this point. Here are some issues to consider…While the agreements signed today do not make Ukraine, Moldova, and Georgia members of the EU, they provide significant market access and also provide obligations for the harmonization of domestic laws with EU standards. For example, the EU fact sheet on the Moldova Association Agreement explains (.pdf):
The Association Agreement (AA) aims to deepen political and economic relations between Moldova and the EU, and to gradually integrate Moldova into the EU Internal Market-the largest single market in the world. This includes the setting up of a Deep and Comprehensive Free Trade Area (DCFTA), which is a core part of the Agreement.
The AA is a concrete way to activate the potential of EU-Moldova relations, focusing on support to core reforms, on economic recovery and growth, governance and sector cooperation.
The AA constitutes a reform agenda for Moldova, based around a comprehensive programme of Moldova’s approximation of its legislation to EU norms, around which all partners of [Moldova] can align themselves and focus their assistance.
The AA negotiations were not a stand-alone exercise. EU assistance to Moldova is linked with the reform agenda as it emerges from the result of negotiations.
The texts of the agreements with Ukraine, Moldova, and Georgia are available via these links. These are sizable texts that have been negotiated over about seven to ten years, depending on the country. For example,
The EU-Georgia Association Agreement counts about 1000 pages and is comprised of:
8 Titles which concern General Principles; Political Dialogue and Reform, Cooperation in the Field of Foreign and Security Policy; Justice, Freedom and Security; Economic Cooperation; Other Cooperation Policies; Trade and Trade-related Matters (DCFTA); Financial Assistance and Anti-Fraud and Control Provision as well asInstitutional, General and Final Provisions;
34 Annexes laying down the relevant EU legislation to be taken over by a specific date; and
Regarding Georgia, another BBC article on the agreements explains that
Georgia is strategically important for the EU because the bloc plans to increase its energy imports from Georgia’s Caucasus neighbour Azerbaijan and Central Asian republics further east. A key pipeline already crosses Georgia. EU leaders worry that Russia – a key energy exporter – may no longer be a reliable partner.
And the World Post explains what these countries hope to gain from association:
European Commission experts estimate the deal will boost Ukraine’s national income by 1.2 billion euros ($1.6 billion) a year. Ukraine won a 15-year transition period during which it can use tariffs to support its domestic auto industry from competition. Moldova will gradually eliminate protections for its dairy, pork, poultry and wine producers over 10 years, while the EU placed limits on imports of chicken from both countries.
An accompanying 10-year plan for Ukraine to adopt EU product regulations will ease the way for international trade beyond Europe.
The trade deal also demands that Ukraine change the way it does business. Adopting EU rules on government contracts, competition policy and copyright for ideas and inventions should improve Ukraine’s economy by reducing widespread corruption and making it more investor-friendly.
Despite attempts at confidence-building by the EU, Russia is viewing this as a threat. Also from the World Post:
“There will undoubtedly be serious consequences for Ukraine and Moldova’s signing,” Russian Deputy Foreign Minister Grigory Karasin said.
President Putin was similarly grim, in the following quotes from the New York Times:
“The acute crisis in this neighboring country seriously troubles us,” Mr. Putin said after a ceremony to receive the credentials of foreign diplomats. “The anti-constitutional coup in Kiev and attempts to artificially impose a choice between Europe and Russia on the Ukrainian people have pushed society toward a split and painful confrontation.”
As I’ve written about here before, Russia had been hoping the states of the former USSR, and especially Ukraine, would join a Moscow-led Eurasian Economic Union . The only current members are Russia, Belarus, and Kazakhstan. Armenia has stated it will join. But Belarus and Armenia are economically small states. And Russia and Kazakhstan have hydrocarbon-based economies, subject to similar market shocks in the oil and gas sectors. Ukraine would have been a relatively populous state with greater an economy that is not based on petrochemical resource-extraction.
Moscow has economic concerns about these deals – it is worried that the Russian market could be flooded by cheap goods from the EU that would hit Russian producers.
More pressing for Moscow are the geopolitical concerns here – the whole idea of former Soviet states, countries that Moscow still views as being within its sphere of influence, drifting towards Europe and one day possibly becoming part of the EU – that really grates with Moscow, particularly in the case of Ukraine.
Possible Russian countermoves could include further use of energy embargoes against Europe, increasing the integration of South Ossetia and Abkhazia as Russian protectorates, increasing the support of separatists in Eastern Ukraine and Transnistria. None of these moves would undo the Association Agreements or make any of the affected countries interested in joining Russia’s Eurasian Economic Union, but they would remain as a constant irritant, a constant protest, over the signing of these agreements.
However, although there may be concern for further push-and-pull between Russia and the EU over Ukraine, Moldova, and Georgia, this also may be a turning point in which the situation will settle into a calmer new status quo. From the New York Times:
Given the ferocity of the Kremlin’s campaign to prevent completion of the accord between Ukraine and Europe, the reaction by senior officials on Friday was relatively muted, reflecting not only acceptance of the inevitability of Mr. Poroshenko’s signing but also the changed circumstances following Russia’s annexation of Crimea, where it has a naval base.
“In the Kremlin, they are calming down and trying to assess the results of this frenzied state of affairs over the last couple of months,” said Konstantin Sonin, vice rector of the Higher School of Economics in Moscow. “I think we make too much rationalization of what the Kremlin does. I think they were very much driven by events.”
But keep in mind that this new status quo would have various thorns in its side, such as the illegal annexation of Crimea, the possible ongoing separatist tensions (that had been and may continue to be stoked by Russia) in Eastern Ukraine, and an underlying current of Russian fears that trade pacts with the EU lead to NATO expansion. All of which is to say that this new status quo may be calmer than the last seven months, but it may not be particularly stable.
This may be a turning point, but it is probably not the end of the journey.