Select Committee on European Union Fourteenth Report


CHAPTER 3: THE INSTITUTIONAL FRAMEWORK FOR RUSSIA-EU RELATIONS

Background

72.  There were no formal relations between the European Community and the Soviet Union for the first decades of the former's existence. The Soviets regarded the European Community as a stalking horse for the Americans, the civilian arm of NATO. They might perhaps have been prepared to recognise the European Community, but only on the basis of reciprocal recognition of the Council for Mutual Economic Assistance (CMEA), which the Europeans regarded as no more than a lever of Soviet economic control over the countries of the Warsaw Pact.

73.  The distance began to be narrowed when, with American agreement, the European Community took the lead in the negotiations over economic matters and human rights which led to the Helsinki Final Act of 1975. Later in the 1970s the Russians sent a team to Brussels to negotiate with the Commission about fisheries matters. Formal recognition finally followed in June 1988 when the EU and the CMEA issued a Joint Declaration, and in December 1988 the European Community concluded a comprehensive Trade and Cooperation Agreement with the Soviet Union.

74.  Since then Russia and the European Union have dealt with one another on a steadily increasing range of matters. The nature of the relationship between Russia and the European Union has been changing as a result of the European Union's enlargement to the border of Russia, and the greater self-confidence that Russia has acquired with its new prosperity and its role as a major supplier of energy products to Europe. Some Russians make it clear that their country is no longer willing to remain under the EU tutelage implied by the EU's "Russian Strategy", and by many of the "unequal" agreements negotiated between the EU and Russia in the 1990s when the Russians consider that they were negotiating from a position of weakness.[37]

The Institutions involved in EU-Russia relations

75.  The European Union is represented in Moscow by a substantial office of the Commission. Marc Franco, the Commission's current Head of Mission, believes that his office is well staffed and is probably amongst the three most effective European missions in Moscow.[38] We were struck by the range of specialisms among the staff whom we met. The office concentrates on the implementation of programmes designed to promote the approximation of Russian and European legislation, better accounting standards and economic legislation, the training of judges, and citizens' awareness of rights and duties (on which the Commission have produced a Russian language handbook for schools). There is also an active human rights programme (see chapters 4 and 7).

BOX 2
EU Institutions

The European Union's policies are adopted and managed by the EU Institutions, including the Commission, the Council and the European Parliament. Their powers vary depending on policy areas. The Commission has significant competence in areas such as trade, the internal market including energy, competition policy, and technical and financial assistance to Russia. The Common Foreign and Security Policy[39] is decided by the Council, assisted by the High Representative, Dr Javier Solana. Cooperation on policing, judicial matters, border controls, and visa matters at present takes place between the appropriate national agencies of the Member States as well as the Commission under the Third Pillar.

The Member States make their contribution to all these activities through their missions in Brussels, through officials in national capitals, and through Ministerial meetings of the Council, the European Council, and informal meetings of foreign ministers.

The Delegation of the European Commission to Russia has been working in Moscow as a diplomatic mission since February 1991.

76.  The Commission's projects are now based on the principle that the EU should not lecture the Russians. Consultants from the West are barely used, and the exchanges are more like consultations between professionals on both sides. The Commission is more willing than before to discontinue projects which the Russians are not interested in, and does not attempt to seek credit where this seems likely to be counter-productive.[40]

77.  Marc Franco told us that good progress was being made on the alignment of legislation. The Russian administration and courts have difficulty in enforcing legislation, which is why the Commission has programmes to assist in improving the legal machinery. Exchanges in the fields of research, technology, and education have accelerated in the past two to three years.

78.  Mr Franco's operations are somewhat hampered by the fact that the Russians prefer to conduct most of their EU business through their Mission in Brussels. He believes that his office will be able to function more effectively when the Lisbon Treaty comes into force. This would entail the addition of at most a couple of extra officials.

79.  We agree with our witnesses in both the Council Secretariat in Brussels and the Commission Office in Moscow that the passage of the Lisbon Treaty should make it easier to co-ordinate and execute the Union's policies towards Russia, and therefore make them more effective. A modest increase in numbers in the Moscow office would provide the additional skills needed. In addition, the mechanisms for cooperation between the Council Secretariat, the Commission, and the Member States missions in Brussels should be strengthened.[41]

THE RUSSIAN INSTITUTIONAL MACHINERY FOR RELATIONS WITH THE EU

BOX 3
The Russian Institutions

In the first years of the formal relationship between Russia and the EU, Russian policy-making was hampered by a lack of knowledge in Moscow of the complexities of the European system, and of the best way of bringing external influence to bear on it. Over the last decade or so, this situation has changed. The Institute of Europe of the Academy of Science was set up in 1987, and conducts research on European Union affairs. The Moscow State Institute for International Affairs houses the European Studies Institute, set up jointly with the support of the European Commission. There are also a number of other bodies such as the "Russia in the United Europe" committee, which contribute to Russian knowledge about the European Union.

Policy-making towards the EU in Moscow was co-ordinated in the past by an inter-ministerial committee chaired by a Deputy Prime Minister. Mr Fradkov, the previous Russian ambassador to the EU, considered, however, after he became Prime Minister in 2004, that policy could more effectively be co-ordinated by the mission in Brussels. The inter-ministerial committee was therefore abolished, and the responsibility for co-ordination fell on the Ministry of Foreign Affairs. The Foreign Ministry insists on keeping a tight control over the business, and is less flexible than the technical ministries, such as the Ministry of Culture and the Ministry of Economics. However, the general line is given from the Kremlin, which also resolves logjams and bureaucratic disagreements.

80.  In its early years, the Russian Mission in Brussels was small, and the staff were inexperienced. Today it is the largest Russian diplomatic mission abroad, the largest third country mission to the EU, and is substantially staffed, with something like one hundred and fifty staff, not only professional diplomats but also experts on specific matters such as agriculture, customs and internal affairs (Ambassador Fedotov, Q 418). It is currently led by an experienced ambassador, Mr Vladimir Chizhov, a former Deputy Foreign Minister, who succeeded Mr Fradkov in July 2005. Mr Chizhov has four Deputy Heads to cover the Four Common Spaces (See Chapter 4). Our witnesses in the Commission told us that the Russian Mission was very active at all levels.

81.  Mr Robert Cooper of the Council secretariat said that in terms of the number of meetings held, Russia is probably number one, ahead even of the US mission, although the relationship with the Americans is less formal and more productive (Q 330).

The Partnership and Cooperation Agreement

82.  The main formal basis of the EU-Russia relationship is the Partnership and Cooperation Agreement (PCA), a treaty signed by EU leaders and President Yeltsin at the Summit in Corfu in June 1994.[42] The Agreement, in the European view, provides an overall political and legal framework for the EU-Russia relationship. It is legally binding, and it provides the basis for "deep economic integration" between the EU and Russia at an unspecified time in the future.

83.  The PCA was negotiated at a time when Russia was struggling with the challenges of transition, and was more ready to sign up to the core principles and common values which were central to the present Agreement. Since then, as we have noted, the nature of the relationship between Russia and the EU has changed, not least because they now share a common border following enlargement of the EU to Finland in 1995 and the enlargement to Poland and the Baltic states in 2004.

BOX 4
The Partnership and Cooperation Agreement
[
43] (PCA)

The PCA was negotiated in 1994 and came into force on 1 December 1997 for an initial duration of 10 years, and provided for automatic extension on an annual basis provided that neither of the partners withdrew or until a new agreement entered into force. The two parties were unable to start negotiations on a replacement agreement in 2007, in part due to a bilateral dispute between Russia and Poland (which has now been resolved) and more fundamentally because the Russians object to the normative provisions of the Agreement. The Agreement remains in place while a replacement agreement is being negotiated. The negotiations on a new PCA are expected to be launched later this year, assuming the EU Member States agree on a mandate.

The various sections of the Agreement cover, in great detail, general principles, a political dialogue, competition, trade, cooperation in financial, economic and legislative, cultural matters, and the prevention of illegal activities. The Agreement provides for Summit meetings twice a year[44] as well as ministerial meetings. Officials from both sides meet regularly to discuss the highly technical matters dealt with under the "Four Common Spaces" or policy areas (see Chapter 4). The "Political Dialogue" is conducted by Ministers and officials from Moscow, the EU Institutions, and national capitals, including the Russian Ambassador to the EU.


84.  Some of our witnesses played down the importance of agreeing a successor to the PCA. Katinka Barysch, Deputy Director of the Centre for European Reform told us that in the present period of uncertainty in EU-Russia relations, "We are in a period where … Russia does exhibit a certain amount of nationalist paranoia, so at the present point in time to sit down and start yet another grand debate about common values and where this relationship should ultimately end up might be bad timing. I think we should let things settle down a bit. We should build mutual trust and everyday cooperation wherever we can achieve it and then maybe at a later point in time come back to negotiating a big comprehensive agreement with joint objectives and more fixed institutional mechanisms … We have moved into all sorts of areas that were not foreseen by the PCA, so it has not held us back, we can roll it over, and we can continue that more pragmatic cooperation in the meantime" (Q 114).

85.  Another view was put forward by Sir Roderic Lyne (former British Ambassador to Russia) who thought that the EU should not attempt to negotiate a grand, overarching new agreement on the lines of the PCA: "the PCA was posited on the idea that Russia was moving towards a situation in which we could say that we had common interests and shared values; and that simply is not the case at the moment ... I think a much more productive approach at this present stage is for us to negotiate on individual, separate issues … some of which may lead to an agreement with them if we have a shared interest …" (Q 152).

BRITISH GOVERNMENT AND EU OFFICIALS' ATTITUDES TO THE PCA

86.  Jim Murphy MP, Europe Minister believed it was important that there was a successor to the PCA because it was "a creature of its time" and did not properly reflect concerns that have grown in importance since it was drafted, such as the threat of terrorism, climate change, migration, and judicial cooperation (QQ 393, 396, 404). Sir Mark Lyall Grant, Political Director, Foreign and Commonwealth Office (FCO), added that "it would be useful to have an updated Partnership and Cooperation Agreement … some of the developments over the last ten years do need to be factored into the new agreement, … including the fact that it would give it sharper dispute-resolution mechanisms, it would give it a more secure legal framework than the existing arrangement and have a greater emphasis on migration, on counter-terrorism and on energy than the original agreement had, which are all areas which have grown in importance over the last ten years" (Q 26).

87.  EU officials we met in Brussels agreed that a new PCA would be desirable, but some thought it more necessary and urgent than others. Eneko Landaburu, Director-General for External Relations in the European Commission, commented that cooperation through the Four Common Spaces was going well despite some difficulties. However, he also stressed the urgency of launching negotiations on a new PCA: "as soon as possible because this will provide us and the Russians with an adequate framework which we need in order to have a real negotiation process, including the energy question" (Q 270).

88.  Patrick Child, Chef de Cabinet of the Commissioner for External Relations stressed that "any institutional framework is as successful or as unsuccessful as the political environment in which it is expected to operate" (Q 348). He said that against that background, the existing PCA and the Four Common Spaces currently provide a good basis for the EU's relations with Russia. However, he also felt that it would be useful to review relations with Russia: "the PCA is … very much a product of the time when it was negotiated". The Commission Office in Moscow thought there was no pressing need for a new PCA, but eventually one would be needed to define the ultimate objective of EU-Russia collaboration, for example, the creation of a deep free-trade area.[45]

89.  Robert Cooper of the Council Secretariat said that the EU could live without negotiating a new PCA. It would be desirable that this should happen in due course, but "this may not be the right moment for it" (Q 327). However, his colleague, David Johns, pointed out that the disadvantage of the Road Maps agreed under the Four Common Spaces, the current basis for cooperation, was that they were not legally binding. The EU's interest in a new PCA came from the need to have a legally binding framework within which EU-Russia cooperation could be intensified.

RUSSIAN ATTITUDES TO THE PCA

90.  Russian attitudes to the PCA are complex. Several of those whom we met in Moscow told us that the Russians did want a new agreement.[46] Some Russians are unhappy that the process is essentially one-way: it involves Russia adopting European technical, legal, and regulatory standards, and there was little flow in the opposite direction. Vladimir Mau[47] at the Working Centre for Economic Reforms of the Russian Government told us that Russian economists thought in the early years (2000 to 2003) that Russia should adopt the European Union's acquis communautaire—the body of EU laws and legal principles, including ECJ case law. He guessed that probably only a third of those people thought the same today; even so, he said, Russian legislation is still in practice being approximated to European legislation. There were two important limitations on the process: law enforcement mechanisms in Russia were not capable of ensuring the practical application even of good laws; and the human capital available was inadequate. On the whole, however, Vladimir Mau thought that cooperation in the Four Spaces of the PCA was helpful in this context.

91.  More disturbing for the Russians are the normative aspects of the PCA on democracy and human rights. Dmitri Suslov told us that there was disagreement within the Kremlin on whether the Russians accepted European norms or whether they insisted on equality. The second tendency was beginning to prevail. It was unlikely that the stalemate would be overcome unless EU policies were changed and there was an identification of genuine common aims in the areas of energy, democracy and the CIS.[48] Although the Agreement is between equals based on mutual commitments, some of the actual language points in a rather different direction. Among the principles set out in the preamble to the Agreement are "the political and economic freedoms which constitute the very basis of the partnership"; and "the paramount importance of the rule of law and respect for human rights, … the establishment of a multiparty system with free and democratic elections and economic liberalisation." The Agreement refers to the obligations which Russia (and the European Community) assumed in these fields under the Helsinki Final Act of 1975 and similar documents. And the provision for a political dialogue binds the Parties to "co-operate on matters pertaining to the observance of the principles of democracy and human rights, and hold consultations, if necessary, on matters related to their due implementation".

92.  The language of the PCA and the associated mechanisms for regular consultations on human rights seem to give the European Union something of a green light to comment on Russia's domestic business (It also gives Russia a similar green light to comment on the domestic business of the members of the EU). This is something which, the Russians are increasingly disinclined to accept (see also chapter 7).

93.  The Russian Ambassador to the UK pointed out that the principals at the EU-Russia Summit in Sochi in 2006 agreed that the PCA would remain in force until it was replaced by a new agreement, thus ensuring that there was no legal vacuum. There was no hurry. What was needed was a "legally binding … politically heavyweight, forward looking framework document, aimed at facilitating a balanced development of the system of sector agreements … complemented by other agreements, whether it be non-proliferation, cooperation in fighting organised crime, counter-terrorism, immigration, asylum" (Q 419). Alexander Grushko, the Russian Deputy Foreign Minister, thought that it was quite sufficient to roll the PCA over from year to year.[49]

94.  Vasily Likhachev, a former Russian Ambassador to the EU, remarked that the existing PCA was not such a bad document: the proposed free trade zone between Russia and the EU was the only one of the ten targets listed in Title III of the Agreement (Trade in Goods) which had not yet been achieved and that problem would be on its way to solution once Russia was in the WTO[50] (see Chapter 4). Dmitri Suslov (Russian Higher School of Economics) told us that the best thing would be to forget about the idea of an all embracing treaty, and concentrate on agreements on sectoral matters, with a political declaration to cover the whole.[51]

95.  It is not clear to us how much interest the Russians will have in negotiating a new legally binding agreement similar to the current PCA with normative aspects on human rights. Although it will not be easy, we believe that negotiations on a replacement Partnership and Cooperation Agreement should be started in 2008. An attempt should be made to enshrine the principles of the Energy Charter Treaty and the Transit Protocol in the new agreement or as a Protocol to it (See Chapter 5). Meanwhile the present PCA should continue to be rolled over.


37   This was reflected in comments by Mr Dmitri Suslov, Meeting, 11 December 2007, Moscow, see Appendix 4 Back

38   Meeting, Mr Marc Franco, Moscow, 11 December, see Appendix 4. Back

39   The CFSP is the so-called "second pillar". Back

40   Meeting, the EU Commission Office, Moscow, 11 December, see Appendix 4. Back

41   We have dealt with this and other aspects on the Lisbon Treaty at length in our Report "The Treaty of Lisbon: An Impact Assessment", HL Paper 62 of Session 2007-08. Back

42   The parties to the Treaty are the European Community and its Member States on the one hand, and Russia on the other. Back

43   http://Ec.europa.eu/external_relations/ceeca/pca/pca_russia  Back

44   In 2007 summits were held in May in Samara, chaired by Mr Putin; and in Mafra in Portugal, chaired by the Portuguese Presidency under Prime Minister, Jose Socrates. Back

45   Meeting, the EU Commission Office, Moscow, 11 December 2007, see Appendix 4. Back

46   Meetings, Mr Yevgeni Primakov, 12 December; Minister Alexander Grushko, 12 December; Mr Mikhail Margelov, 12 December, Moscow, see Appendix 4.  Back

47   Meeting, Mr Vladimir Mau, Moscow, 12 December 2007, see Appendix 4 Back

48   Meeting, Mr Dmitri Suslov, Moscow, 11 December 2008, see Appendix 4.  Back

49   Meeting, Mr Alexander Grushko, Moscow, 12 December 2007, see Appendix 4. Back

50   Meeting, Ambassador Vasily Likhachev, Moscow, 12 December 2007, see Appendix 4. Back

51   Meeting, Mr Dmitri Suslov, Moscow, 11 December 2007, see Appendix 4. Back


 
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