Overhauling and Upgrading the PCA: A Political Perspective

The Partnership and Cooperation Agreement (PCA) between the Russian Federation and the European communities and their member states constitutes the legal basis for their relations. It provides the foundation for the establishment of institutions and for cooperation. The PCA specifies areas of such cooperation and establishes the trade regime, as well as that for launching businesses in Russia and the EU countries. It establishes the principle of nondiscrimination of parties and of their citizens, employees and economic operators.

However, this document is only the first step in setting up mutually beneficial cooperation and partnership. To be put into practice, it needs to be reinforced by the strong political will to move forward, to consider the other party's interests, and to proceed from what unites the parties, rather than what separates them. It is also necessary to opt for a definite pattern of social, economic and political evolution, and to develop a specific culture of cooperation, of readiness to compromise and of dispute and conflict resolution. Mutual respect and trust are essential.

Building a comfortable home for mutually beneficial cooperation and partnership has been a failure from the time the PCA was signed on the island of Corfu in 1994 and came into force in 1997 until now. Instead, the home has become shabby and warped, which can hardly suit either party. Both Moscow and Brussels continue to shape their inner and outer space separately from each other, following different approaches. Hence the endless succession of frictions, low-intensity crises, misunderstanding, and mutual suspicion. The declared goal of forming of a number of common spaces has produced little change in the state of affairs.

The agreement's initial 10-year term expires in 2007. Having been persuaded by Russia, Brussels has acknowledged that the mere prolongation of the PCA will not solve the problem. Fundamentally out-dated, the latter no longer meets the evolving requirements for the legal regulation of the relations between the parties, and of their cooperation on international issues. It no longer captures changes that have affected both Russia and the EU over the past ten years.

A new agreement, which can be conventionally referred to as the PCA-2  , offers Moscow and Brussels an opportunity to considerably change the character of their partnership and cooperation, to lay out a course for their development for years to come, and to elaborate a reasonably detailed vision of a Greater Europe. This opportunity must not be missed. Everything that is useful, efficient and promising in the PCA and Russia-EU cooperation experience should be taken, leaving aside all that is already out-of-date and does not work. It is essential that new effective cooperation mechanisms be created, and logistic and procedural practices be conformed.

Today the need for a new agreement is no longer disputed. The question is rather what kind of an agreement do Russia and the EU require? What can help or interfere with its conclusion? What are the objective interests of the parties and how can PCA-2 fit into the system regulating relations between Moscow and the rest of Europe?

These are the questions on which this contribution concentrates. It begins, however, by recalling the 2007 problem and the arguments which were offered in support of different solutions to that problem.

 

1. The 2007 problem: a divergence of views

Since the signing of the PCA, Russia and the EU have been confronted with a number of problems in their relations. They have also gained a great deal of positive experience. The expiration of the agreement provides a good opportunity to draw certain conclusions, to look into the future and to elaborate on proposals aimed at upgrading the legal basis underlying bilateral relations. In consideration of all the circumstances, the Russian leadership raised the issue of resolving the 2007 problem already several years ago.

The PCA has accomplished its historic mission by facilitating a smooth transition from confrontation to cooperation and partnership in relations between Russia and the EU. Although the time period has been relatively brief, in terms of historical process it may equal a whole epoch. The situation in Russia has drastically changed, with substantial improvement in its international performance. The European Union has become different too. Its membership has doubled, and the integration of its member states has been taken to a new level. The current volume of cooperation between Russia and the EU cannot be compared to that of the 1990s. This leads to the conclusion that the PCA has become hopelessly obsolete.

The agreement is outdated, in the first place. That is why it was quite reasonable for the Russian party to raise the issue of the 2007 problem well in advance. For quite some time, the European Commission and the member states hesitated. They argued that the balance sheet of positive and negative features in the PCA suggested that further extension of the agreement in its present form would be a better solution. However, Moscow has been able to convince its partners that its approach was appropriate.

From 2005 to 2007, different proposals were put forward suggesting different solutions to the 2007 problem. Their discussion has resulted in a complex agreement, although multiple concepts are still subject to debate. Several major approaches to solving the problem are singled out below.

Some experts continue to argue in favour of maintaining the status quo. They claim that the current PCA is highly flexible and hinders neither expansion into new areas of cooperation, nor steps to upgrade the mechanism for cooperation. The actual overhaul and adjustment of the PCA already occurs spontaneously. The essential issue is that the PCA reflects an “ideal” vision of the partnership between Russia and the EU. It allegedly contains the maximum of what Moscow and Brussels can expect. Therefore, any adjustments to the PCA should be put aside, as sufficient doubt exists as to whether new negotiations will be able to bring about better results.

A number of the experts are opposed to shaping the strategic partnership between Russia and the EU in a legally binding form. They argue that strengthening the legal foundation of their interaction lacks political and economic preconditions. The relationship between Russia and the EU is burdened with numerous divergent disputes. Moreover, Russia has not yet acceded to the WTO. Thus, they argue, it is worthwhile waiting until the EU's constitutional crisis and the parliamentary and presidential elections in Russia are over, thus paving the way for the consideration of a new binding agreement. In the meantime, it would be sufficient to adopt a political declaration while cooperation in specific areas could be regulated by a series of sectoral agreements.

Prospective proposals for upgrading the PCA were submitted by a working group of the “Russia in the United Europe” Committee  . It suggested preserving all that is positive in the current agreement while introducing required amendments and additions through an additional agreement. This approach would help avoid the creation of a legal vacuum in regulating relations between Russia and the EU while at the same time allowing unimpeded cooperation beyond any time constraints.

One of the alternatives proposed by the group foresaw the establishment of an association between Russia and the EU. However, for political and practical reasons, this idea was dropped. Whereas Russia proceeded on the basis of a classical concept of association in international law, the European Commission was only prepared to discuss this concept based on its own practice of concluding agreements on association. This did not satisfy Moscow.

In the course of bilateral consultations from autumn 2005 to spring 2006, the parties agreed to formulate a common understanding of the need for a new agreement. Moscow and Brussels concluded that this would help to correct the shortcomings of the current PCA and raise bilateral relations to a new level. They agreed that the new agreement should be legally binding, since a political declaration would not ensure the implementation of agreed rules by recourse to appropriate legal procedures and mechanisms.

The new agreement was to include a description of the upgraded mechanism for regulating the partnership, legal fundamentals and methods for developing the four common spaces and, inter alia, a substantial section on political cooperation.

The parties dropped the initially considered idea of signing a framework agreement. In raising the concept of a framework agreement, the negotiators meant a document to be supplemented with a number of sectoral agreements and not its legal nature. They changed their minds after having been prompted by lawyers who had warned that this confusion of terms could result in the European Court of Justice as well as national courts of all levels being unable to apply important provisions of a future agreement which did not establish direct norms to become Law in Russia, the EU and its member states.

 

2. Objective conditions for a rapprochement

The rationale of raising the 2007 problem and the approaches suggested to for resolving it have predetermined the major requirements for the PCA-2. Concluding the new agreement will only make sense provided it differs considerably from the current one. In order to be better, and not worse, it must meet at least the following conditions. The PCA-2 must be a working agreement. While preparing it, the parties should avoid using general and empty words. It must establish clearly spelled-out obligations and legal regimes. The bodies in charge of partnership governance must be authorized to work out regulations to further develop the original obligations and legal regimes. Each party must be empowered to trigger mechanisms of settling disputes and differences which may arise while interpreting and applying the agreement. Decisions made in the course of settling disputes shall be mandatory, preferably to the same degree as national ones.

The PCA-2 must include direct norms, upon which basis subjects of Russian and EU law, individuals and legal entities can directly build legal relations. These norms must reinforce the rights of private persons and organizations in such a form that their realization does not depend on enacting measures for their implementation. Direct norms must have the broadest application. They should be designed to regulate most aspects of cross-border movement of goods, labor force, services and capital as well as the residence and activities of private persons and organizations abroad.

The agreement should be permeated with the idea of equal cooperation among Russia, the EU and its member states, ruling out any one-sided or discriminatory measures. The bodies governing the partnership shall be established on parity principles. The same principles shall apply to decision-making mechanisms and procedures as well as to the oversight over the implementation of the adopted decisions.

The PCA's institutional, normative and programmatic provisions should be integrational by nature, the integration being both a major goal of cooperation and partnership and an instrument for attaining other tasks set by the agreement, such as ensuring political stability and security, economic prosperity, rising wealth, increasing global competitiveness and others. The agreement should elaborate on the timetable for transition from the existing legal regimes regulating cooperation towards enhanced regimes regulating the operation of a single market within the entire European Continent.

The subject-matter of the PCA-2 should be formulated as generally as possible. In fact, the agreement should be truly universal since, indeed, the EU today is an integrating union with the universal competence to deal with all the affairs of its member states. One of the ways to give the agreement a universal nature is to include all areas of cooperation enumerated in the current PCA and in the “road maps”. This may seem sufficient at first glance, but just at first. The parties trying to cover the entire list of cooperation areas will soon realize that gaps remain. Moreover, life goes on and the near future may witness new directions of cooperation that are not obvious at present. Therefore, this list should be supplemented with a general statement that the new agreement's provisions apply to all cases of bilateral relations.

Flexibility and viability shall distinguish the PCA-2. This is the only way to render the Russia-EU strategic partnership sufficiently dynamic. With Moscow and Brussels just entering the process of rapprochement and closer cooperation, the new agreement is designed to give a powerful impetus to the development of a strategic partnership and to provide a favorable political and legal framework for it. Therefore, the PCA-2 should, at a minimum, avoid interference with new forms, methods, procedures and practices of cooperation, and, even better, should simplify their application. To this end the bodies governing the partnership shall be authorized to revise, supplement and improve the agreement without using the cumbersome procedure of ratifying amendments and additions. The same authorization should be provided for dealing with issues related to the schedule of transition from the current legal regime to others, in order to form common spaces within the continent and to anchor the basic freedoms of a common market.

The PCA-2 should be a binding agreement fixing the objective interests of Russia and the EU in their strategic partnership and rapprochement. It should appropriately reflect and shape the political and legal conditions for the steady and effective realization of existing potential.

In the heat of debate, politicians and experts tend to forget the objective interest in the closest cooperation between Russia and the EU, although this interest is quite obvious.

Russia and the EU are not two opposing civilizations lacking a dialogue. The people of Russia, together with its outstanding personalities, have contributed significantly to the making of European civilization. Russia and the EU member states are bound together by common culture, traditions and history. The integrational possibilities of the rapprochement of the two halves of our continent manifest the enormous cultural diversity and richness of European civilization.

Both Russia and other European countries are confronted with similar problems in their internal development, such as eliminating the gap between the rich and the poor, reforming social security systems – including the provision of pensions and health care, fighting extremism, religious fanaticism and separatism, regulation of migration, etc. Joint efforts and common experience will help to manage these problems.

Russia and the EU have yet to adequately respond to mounting global challenges. Weapons of mass destruction as well as nuclear and missile technologies are rapidly spreading throughout the world. Our climate is drastically affected by man-made factors. Humanity seems to be losing the war against international terrorism, drugs trafficking, organized crime and corruption. The threat of vital resources exhaustion is becoming real. Development programs keep ‘slipping' year after year. Global challenges must be addressed together.

The Russia-EU partnership is capable of producing a substantial synergetic effect in social and economic areas. Combining research and technological potential, lifting administrative barriers, progressing from elementary trade to complex production chains and intra-sectoral integration, efficiently utilizing natural resources – all this can turn Greater Europe into a prosperous continent with a solid competitive edge.

Russia and the EU have great prospects in the international sphere as well. Both Moscow and Brussels speak out for the strengthening of UN authority, and for respect for and observance of international law. The prevention of another arms race, the settlement of international conflicts, and the success of preventive diplomacy will largely depend on their cooperation.

These are all the advantages of cooperation. If it fails to develop, this will become a list of lost opportunities. Holding on to policies for Russia's containment and isolation as well as to policies aimed at opposition toward the EU will only aggravate the above problems, increasing the unpredictability of global developments as well as the disproportions of the world order, which has been considerably destabilized over the past few years. The balance of the pros and cons of the strategic partnership seems obvious enough. Nonetheless, there are a lot of high-profile and influential people, both in Russia and the EU, who hold a different opinion.

 

3. Opposition to the New Agreement in the EU and Russia

Warsaw's veto over the opening of negotiations on the new agreement can be interpreted differently. For Poland, it is an attempt at self-affirmation within the EU, a desire to solve its own problems at the expense of others and to exert pressure on Russia by internationalizing bilateral disputes. Deliberately or not, Warsaw has become a mouthpiece of those circles which fail to treat the strategic partnership with Russia presupposing equal relations and do not hesitate to damage the other party as an evident asset. This becomes clear considering the persistence with which Poland has blocked the negotiations and the EU's failure to adopt a mandate for the negotiations and to work out a common position.

A massive smear campaign against Russia's domestic and foreign policy in the European mass media reveals opposition to the Russia-EU partnership in the EU member states. Admittedly, the political realities in Russia and its political regime do create opportunities for criticism. However, objective criticism accompanied with an honest assessment of the progress achieved is different from painting everything black.

The political establishment of the EU and its member states accuses Putin of numerous mortal sins, such as eliminating the democratic achievements of the previous regime, nationalizing the economy and turning it into a monoculture based on the export of energy resources, and using the latter as an instrument for political pressure. He is also blamed for pursuing an imperialistic policy toward neighboring states, and for taking a hard line on certain international issues, to mention but a few points. All these accusations are based on subjective judgments rather than on facts. They reveal the intention to extract one-sided advantages or to treat Russia as an object of EU policy but not as an equal and influential partner in international relations.

Russia has made its choice. It has made its unique contribution to the assertion of democracy on the Continent at the turn of the 1980s and 1990s. It is unfair to ignore this. Russia is following and will continue to follow the democratic path. This was once again emphasized in the annual address of the President of the Russian Federation to the nation on April 25 th 2007. Yet any advance along this path presupposes the parallel resolution of a wide range of current social and economic problems: doing away with poverty and the impoverishment of the population, developing the capability of the state to provide all – and not only government officials and businessmen – with a basic set of social guarantees, etc. Obtaining these goals in Russia's specific conditions requires the continuity of power and the consolidation of society. It should also be acknowledged that the system of government that arose in Russia shortly after it had acquired the status of an independent state is best described as a combination of the rule of oligarchy, anarchy, separatism, looting the state's resources, etc. Those who lament that these features of the young Russian government have disappeared today are either naпvely misled or are shedding crocodile tears.

Moreover, despite substantial speculation on the topic, there is no value gap between Russia and the EU countries. The absence of any gap is guaranteed by the congruity between the basic laws of Russia and the EU countries, their identical participation in a large package of respective international instruments and also the subordination of the domestic legal order in Russia to strict international control  . Democratic Russia has never opposed common human values. The Cold War with its ideological confrontation is over. As far as human values are concerned, Moscow only insists on a few basic things.

Firstly, no one has a monopoly on the truth. The balance of values in every society constantly changes. Russia and the EU should therefore discuss these issues in a patient and unbiased manner. Secondly, the concept of values is much wider than it may seem. It also includes the moral state of a society, its care for the dispossessed and a lot more. Thirdly, there should be no taboo on discussing human values. No developments in the EU member states should be exempted from criticism or outside observation. The dialogue should concentrate not on Russia and its obligations, but on common problems and mutual understanding. Fourthly, none of the parties should take upon itself the role of judge. A mentor-like tone and baseless reproaches are also out of place. A joint discussion of complex problems presupposes a joint evaluation of both particular facts and events and of the general situation. Fifthly, the parties cannot remain indifferent to the informational background, often hostile, which accompanies the dialogue. Confrontational rhetoric must be softened. Opening the dialogue as widely as possible and engaging the wider public in discussing the issue of values in their modern interpretations would promote an atmosphere of better understanding. Sixthly, any agreement related to the discussion of values must refrain from any unilateral sanctions or other hostile actions.

Opinions may differ as to the policy of the current Russian government aimed at restoring the state's control over a number of industrial and services sectors. During the first years of independence, Russia's ruling elite made an attempt to relieve the government of its direct control over the economy, by assigning it the role of “night watchman” as defined in the classic economic theory of the 18 th and 19 th centuries. The attempt turned out to be a failure and its negative effects have not been overcome until now. Modern reality proved far removed from the classic theories. A modern government must have powerful levers to redistribute profits and to support a national manufacturer. Whenever private businesses fail to address the general problems of economic development facing the community, then the government must assist or even replace them. Moreover, mergers and the ascendance of market leaders are common international practice typical of both post-industrial states and emerging markets.

As to the dominance of the extraction and export of raw materials – primarily energy resources – in the Russian economy, it is perceived as a peril. This problem is the subject of intensive discussions and is the focus of political debate. As a result, the state has started to address the task of diversifying the economy, implementing industrial policy and national projects. It now gives priority to investing in human resources. All this became possible only after the economy had been more or less stabilized. However, at present the new economic policy can only rely on revenues from the export of energy resources and the growing purchasing power of the population.

Russia is dependent on the export of its oil and gas exactly in the same way that the EU countries depend on its import. Thus, even if energy exports are referred to as an “energy weapon”, it should be understood as a reciprocal one. Its abuse can be dangerous both for those it is directed against and those who resort to it. Discussions about the “energy weapon,” reminiscent of the 1973-1974 oil crisis, have already cost far too much both to Russia and the EU. The use of such phrases can be a no less destructive weapon than the energy resources themselves.

One of the common cliches is Russia's alleged imperial policy. This is regularly used by those who seek to advance their own interests in the countries neighboring Russia. Sharing numerous historical, cultural and economic ties with these countries, Russia has never denied having essential interests in them and is not going to move out simply because someone objects to its presence or because it can be accused of “imperial ambitions”.

The set of stereotypes and cliches about modern Russia circulating in the EU countries distorts rather than explains the developments unfolding in the country. These developments cannot be interpreted in a simple way. They reveal different directions, and advances may often be accompanied by retreats. Much is accomplished more slowly and less effectively than desired. However, the accusations made against Russia are not quite correct. They are based on one-sided, biased and subjective judgments which distort the proper assessment of the reality, needs and interests of Russia and the EU.

Yet those cliches and stereotypes are deliberately used and released by a number of countries for political reasons. Since its recent enlargement, the EU has become extremely heterogeneous. In the past, the European Union was confronted with problems of defining its identity and shaping its Common Foreign and Security Policy. However, never before could the position of one country or an absolute minority of countries have such a destructive effect on the CFSP. With regard to Russia, different EU countries pursue almost opposite policies. The above-mentioned cliches and stereotypes – which do not reflect the real needs for the development of Russia-EU relations – regretfully become instrumental in the struggle for influence and the redistribution of financial flows within the EU.

The end of the Cold War offered unique opportunities for the close interaction of former adversaries on the international arena. Mutual containment policies as well as ideological confrontation could no longer interfere. It is only to be regretted that Russia and the EU failed to take up the opportunity. To deny the existence of such opportunities now or to claim that they have diminished means an even greater setback for international cooperation, which is not in the interests of either party. Nor is it in the interests of the strategic partnership between them.

In Russia, there are also influential groups opposing the idea of a strategic partnership agreement with the EU. Their arguments mirror those stereotypes that are rooted in the public opinion of the EU countries. This time it is the EU that is demonized and viewed with bias.

Many politicians and experts in Russia accuse the EU of applying double standards, double-dealing, pursuing an anti-Russian policy or taking a hard-line course toward Russia. They argue that the EU pursues its own mercantile interests by fair means or foul  . The issue of common value, they claim, is raised in order to weaken Russia's competitive advantages, and to separate it from the states and nations with which it is historically linked. Moreover, the EU, in their opinion, cannot be Russia's reliable and predictable partner because it is gripped by acute inner crisis. They claim the EU is being manipulated by new member states with different interests and incompatible approaches to the EU's core problem, which is to delegate national sovereignty to supranational institutions. The EU countries, they argue, are facing mounting social, economic, cultural, and demographic problems. They see a manifestation of this trend in the failure of EU-constitutional referenda in France and the Netherlands. Thus they conclude that the EU is unable to engage in any strategic partnership with Russia, as it is fully absorbed by internal problems. Another argument goes that the EU is losing the global competition to the US and the “young tigers” of East Asia, lagging behind in economic growth and structural reforms. The loss of competitiveness raises the question of the viability of Europe's social model and its possible partial revision, which to some extent has already begun. They conclude by asserting that there is no future for a partnership with the EU, which is an insincere, unreliable and weakening entity, whereas Russia has more attractive alternatives of setting up closer relations with other regions, pursuing an equidistant policy with all existing blocks and/or following its own unique path.

As with the cliches in circulation in the EU, those circulating in Russia are also only partially true. It is natural that the EU is tough and consistent in pursuing its interests and the interests of its member states. However, it is groundless to accuse the EU of ignoring the concepts of international law, rule of law, pluralistic democracy, respect for human rights and cultural diversity. The EU proceeds on the basis that adherence to these principles ensures the peace and prosperity of its member states and can equally benefit neighboring countries. Thus the accusations of double-dealing could be avoided if both Russia and the EU had learned to benefit jointly from the implementation of these principles without seeking to manipulate them.

The laments about the EU's inner crisis and the loss of competitiveness of its member states are also far from reality. No doubt it will take time for the EU to learn to work efficiently with almost 30 members. But these are temporary difficulties. The EU has a rich experience in overcoming crises, as well as relevant mechanisms and a powerful political culture. The EU remains the world's largest financial and economic centre. It has entered post-industrial society. Higher growth rates in other regions are largely due to the activities of European transnational companies. Europe is developing in a much more harmonious way than other regions. There is no reason to worry about its fate.

Finally, it will be an obvious mistake to contrast Russia's Asian policy with its partnership with the EU. It is wrong to believe that an East-oriented policy will bring Russia more benefits, predictability, and better prospects. Today the amount of trade and economic interaction between Russia and East Asia lags far behind the cooperation of Russia with the EU. Russia and Asia are competitors on the raw materials markets. Besides, the East-Asian countries can't compete with the EU as far as Russian imports of technologies and hi-tech products are concerned. The economies of Russia and East Asia are hardly complementary. And the Asian markets are already divided, so that Russian companies will have to enter each of them, taking high risks if they apply one-sided policies.

The possibility of a convergence between Russia and Central and East Asia is even more disputable from a cultural and political perspective. Russia is a European state in its traditions, mentality and political preferences. Russia's orientation to the European social, economic and political model conforms with the interests of its people, including political elite. Russia is unlikely to gain from focusing on its Asian neighbors. The assumption that they would cooperate with Russia at the expense of the West is a mere illusion.

The least convincing approach is self-isolation and the concept of Russia's own unique path. The Russian Empire once made an attempt to divert from the mainstream in the early 20 th century. Repeating this mistake now, from a much less favorable departure point, will bring the country to a dead end. “The third way” has no hope of ensuring harmonious inner development, national revival or independence in international relations.

The above shows that the EU is a natural partner for Russia. A new strategic partnership agreement would express this fact.

 

4. Basic Constituent Features of the PCA-2

Russia and the EU have reached only a general consensus to conclude a new agreement. Only a few details have been sorted out so far. The new document is supposed to build upon the PCA provisions, to be binding and to include new areas of cooperation. It will incorporate the work done on the basis of the “road maps” to lead to the formation of common spaces. With Russia's forthcoming WTO accession, the new agreement will not have to reiterate its provisions. More space will be given to the sections dealing with political cooperation and institutional arrangements. In devising the new agreement, both parties will focus on the most general and essential issues, whereas specific legal regimes and sectoral cooperation will be the subject of separate agreements.

The Russian delegation headed by the permanent representative at the EU has received preliminary instructions from the government. These provide, in particular, that the agreement should include, apart from a preamble, sections devoted to each of the common spaces and to institutional issues. The forthcoming negotiations are supposed to determine how specific the new agreement must be, how the general legal regimes will relate to sectoral agreements, which asymmetrical obligations and transitional regimes shall be provided, and what will be the time frame for the implementation of measures for approximation, harmonization and unification.

It is desirable that the PCA-2 should establish as detailed norms as possible. That would increase the legal certainty of our relations. However, too many details can make the agreement too complex and technical. What is needed is a reasonable balance: the description of the basic legal regimes, procedures and mechanisms should be supported by mechanisms ensuring their further development and implementation. This would provide civil servants, business communities and individuals with a clear idea of how and in what direction to carry out their work. The subject of the PCA-2 should not be only relations between Russia and the EU, but largely the formation of common spaces in the economy, internal and external security, science, culture and education. To this end, it should include direct norms which, according to Article 15.3 of the Russian Constitution and the EU law, would become part of the internal legislation of both Russia and EU member states by being superior to the latter and subject to legal protection. These would then serve as grounds for initiating legal relations. The inclusion of such norms will turn the agreement into a real instrument of integration. The latter cannot be driven by political directives in a top-down manner. It can only result from private initiative taking advantage of the practical implementation of international agreements. If individuals and business communities gain the opportunity to claim their rights as established by the agreement in national courts, the integration between Russia and the EU will break through.

As to private persons, the new agreement should ban any discrimination against the citizens of Russia in contrast with citizens of the EU member states and vice versa. They should be offered ultimately identical civil, political, social, economic and cultural rights by applying the national legal regime as a basis for regulating the legal status of immigrants from Russia and EU countries on their respective territories. Step by step this principle could be extended to labour migrants and to the participation of immigrants in the social, economic and political life of the society in which citizens of Russia and the EU choose to live and work.

The new agreement should help the business community resolve a number of interconnected problems. Russian companies – small, medium and large – are interested in gaining access to the EU's growing market free from discrimination. They should be exempted from the EU's current administrative restrictions, whether tacit or explicit. They would also benefit from the introduction of a national regime.

In the areas where Russia's internal market has achieved a higher level of liberalization than in the EU, Russian manufacturers are interested either in simply leveling the field, or in being compensated, or in receiving special state support. This interest can be met by either symmetrical and asymmetrical liberalization of markets. Moreover, in areas where partners in the EU enjoy unfair advantages, protective measures should be exempted from the general regime protecting fair competition.

It is necessary to introduce norms prohibiting any politically motivated restrictions on joint economic, industrial or financial projects which have nothing to do with protecting fair competition. It is also important to provide accessible and effective remedies to protect businesses from one-sided measures which deprive Russian entrepreneurs from traditional and/or natural competitive advantages. It is even more vital to formulate mechanisms to prevent unjustified restrictions on competition. At the same time it is clear that in a number of economic areas, Russian companies need protection and support during a transition period while they are getting up on their feet.

The Russian business community is looking to the new agreement as an instrument for integration and for increased opportunities for cooperation with partners in the EU. This implies that the PCA-2 should be built on the formula “WTO+”, or “PCA+” providing for enhanced free trade and a gradual transition to common spaces with elements of a single market. The “WTO+” or “PCA+” formula boils down to ensuring liberty for the operations of European companies on the evolving common market irrespective of their national status.

Finally, the institutions governing the partnership may take different forms with greater or lesser involvement. They shall not be allowed, however, to work in vain. For this purpose, they should be explicitly tasked to serve the interests of individuals and businesses as well as to ensure the functioning of the common spaces.

Mark L. ENTIN,
European Studies Institute at MGIMO-University director

№11(16), 2007