PARTNERSHIP AND COOPERATION AGREEMENTS (PCAs)
WITH NEWLY INDEPENDENT STATES (NIS)
1. PCAs have been negotiated with all the
NIS except Tajikistan. The PCAs with Russia, Ukraine and Moldova
are already in force. Those with Armenia, Azerbaijan, Georgia,
Kazakhstan, Kyrgyzstan and Uzbekistan are expected to enter into
force on 1 July 1999. The PCA with Turkmenistan has been signed
and transmitted to the European Parliament and Member States'
parliaments for ratification.
2. Pending the entry into force of the PCAs,
the 1989 Trade and Cooperation Agreement with the USSR is applied
on a bilateral basis with each of the USSR's successor states,
and Joint Committees on that legal basis have so far been held
with all NIS except Tajikistan; a first JC with that Country is
scheduled to take place in Autumn 1999. The trade provisions of
the PCAs do not require formal ratification and can be applied
in advance through Interim Agreements, which as they enter into
force automatically replace the trade provisions of the 1989 Agreement.
Nature of PCAs
3. PCAs are mixed agreements based initially
on Articles 113 and 235 (EEC) and 101 (Euratom); Other legal bases
have been added notably following the ECJ judgement on the Uruguay
Round. The negotiations are based upon (extremely detailed) directives
received from the Council in October 1992. It was the intention
then that substantially similar agreements should be negotiated
with all the NIS. However, the increasing disparities between
them, and the outcome of the negotiations with Russia, led the
Commission to propose a new strategy,
differentiating between the "European" NIS,
to whom the economic concessions (if not all the political ones)
agreed with Russia were extended, and the rest. The Council endorsed
this approach in March 1994 and subsequently approved modifications
of the 1992 mandate in the case of each of the "European"
4. PCAs are a "halfway house"
between standard framework agreements of the sort the Commission
has negotiated with a number of countries round the world and
the "Europe Agreement". They foresee an institutionalised
political dialogue and contain detailed trade and investment related
provisions, but the latter do not establish a preferential relationship
(ie do not offer concessions beyond those given to GATT/WTO partners).
The possibility of such a relationship in future is however raised
in the PCAs with the "European" NIS; these contain a
"rendez-vous" clause allowing for the circumstances
to be examined under which negotiations on a free trade agreement
(FTS) could be initiated.
Content of standard PCAs
5. These consist of the following principal
(i) a preamble containing
a number of statements of intention, notably regarding commitments
to uphold democracy, human rights and the rule of law and the
principles set out in the CSCE documents; expressing (EU) support
for the independence, sovereignty and territorial integrity of
the partner; and noting the importance for implementation of continuing
reform. The preamble also expresses the principal objective underlying
the PCA conceptie the gradual drawing-in of the partner
into the wider European space.
(ii) general principles which reiterate
the essential elements (democracy, human rights, market economy)
underlying the agreement; stress the importance of regional co-operation;
and mention the future development of the relationship including,
in the case of the European NIS, the perspective of an FTA.
(iii) A regular political dialogue is
provided for at Ministerial level and below, and also at parliamentary
(iv) A section trade in goods: Both
sides offer MFN treatment regarding tariffs and duties, which
reserving NIS' right to conclude GATTcompatible preferential
arrangements. Any intra-CIS arrangements which are not compatible
must be made subject to the MFN clause by the end of 1998. Trade
in goods other than textiles, coal and steel are liberalised and
the latter made subject if necessary to bilateral agreements:
however, both sides may , if facing damaging import flows, use
the safeguard clause (more liberal for the European NIS) and the
European NIS have an Annex which allows them to introduce temporary
quantitative restrictions, under certain conditions. There is
a commitment to apply GATT anti-dumping provisions (with a consultation
clause for European NIS). Nuclear trade is subject to special
conditions. All NIS except Russia commit to trade at market prices
(v) Labour conditions: These forbid
discrimination on working conditions for legally-employed nationals
of the other party. The European NIS also have provisions on co-ordination
of social security for their workers in EU countries.
(vi) Establishment and operation of
enterprises: This section provides that investing companies are
not discriminated compared to third country companies. The NIS
also offer non-discrimination compared to domestic companies (national
treatment). National treatment or MFN, whichever is the better,
is the basic standard for treatment of already established companies.
There are special conditions for shipping agencies. The third
countries give commitments not to introduce restrictive legislation
without warning and in any event to allow investors a three-year
(vii) regarding cross-border services,
there is a non-binding commitment to liberalise (on the lines
of the EC's, GATS offer). For Russia and Belarus, a list of services
where both sides offer MFN treatment has been agreed.
(viii) current payments in convertible
currency and flows of direct investment capital are liberalised.
There is a standstill on new foreign exchange restrictions.
(ix) intellectual property NIS commit
to raise protection to European levels and to offer MFN treatment.
(x) a range of economic, legislative,
environmental scientific, cultural and other co-operation chapters
cover most non-military activities, including financial support
which, it is specified, is provided through Tacis, the EC's technical
assistance programme for the NIS.
(xi) with the more recent PCAs (Caucasus
and Uzbekistan) new chapters on co-operation in the fields of
democracy and human rights and illegal activities (including immigration)
have been incorporated.
(xii) institutional and general provisions:
including inter alia the establishment of the Co-operation
Council (at Ministerial level) the Co-operation Committee (at
official level) and the Parliamentary Co-operation Committee;
the dispute settlement procedure; and the "suspension clause"
allowing a party to suspend the agreement if the "essential
elements" (see (ii) above) are breached. The agreement is
concluded for 10 years with thereafter tacit annual renewal.
(xiii) Normally there is a single protocol,
on mutual assistance in customs matters.
7 In its Working paper COM(94) 258 on contractual
relations with the NIS. Back
Russia, Ukraine, Belarus and Moldova. Back