Select Committee on European Union Fourteenth Report


CHAPTER 4:  BUILDING CLOSER COOPERATION THROUGH THE COMMON SPACES

96.  This chapter reviews some of the progress that has been made in the framework of the Common Spaces.[52] In relation to the Common Economic Space, we discuss the prospect of Russia's accession to the World Trade Organisation (WTO) and EU-Russia cooperation on climate change. We assess recent progress under the Common Space of Freedom, Security and Justice, such as on counter-terrorism, visa facilitation and Kaliningrad. We examine the Common Space on Research and Education, including Culture, and cover the issue of the recent Russian attacks on the British Council offices in St Petersburg and Ekaterinburg. Issues relating to the Common Space on External Security are dealt with in Chapter 6, and energy is the subject of Chapter 5. The commercial relationship, which is linked to the Common Economic Space, was covered in Chapter 2.

BOX 5
The Four Common Spaces

At their St Petersburg Summit in May 2003, the EU and Russia agreed to create four 'common spaces' for more detailed cooperation. These are an "Economic Space", to work out measures of trade and economic cooperation; a "Space of Freedom, Security and Justice", which has already made progress on outstanding visa issues and on measures to combat terrorism; a "Space on External Security", to reinforce multilateral cooperation especially in the fight against terrorism, non-proliferation, crisis management, and civil protection, and to stabilise the regions around Russia; and a "Space on Research, Education and Culture" to support cooperation in research, academic and cultural exchanges, and language teaching, among other things.

In May 2005 the Summit in Moscow adopted so-called "Road Maps" which set out in great detail the work that needed to be done to make the "common spaces" a reality.


97.  Katinka Barysch of the Centre for European Reform told us that the pragmatic and flexible nature of the Four Spaces were their main strength: "Some of what was initially envisaged in the Partnership and Cooperation Agreement as a structure of expert committees and then moving up the hierarchy until you reached a six-monthly EU/Russia summit is now defunct and some of that has become an area of contention. When it comes to ministerial meetings, for example, Russia has always been in favour of having some kind of EU/Russia Council there to meet all the Member States at the same time, whereas of course the European side insists on Russia meeting the Troika.[53] What we have done is we have been very flexible about this and under the four common spaces we have set up a new structure of expert groups. The Common Spaces idea leaves us ultimate flexibility with regards to the institutions" (Q 114).

98.  In terms of financial support, as Russia becomes more prosperous the need for development-related technical assistance of the kind that the EU was providing under the Tacis Programme[54] is rapidly diminishing. Under the new European Neighbourhood and Partnership Instrument (ENPI) the EU will be reducing quite substantially the overall financial volume devoted to the Russia programme (Q 344). Patrick Child, Chef de Cabinet of Commissioner for External Relations Ferrero-Waldner explained that the EU will be concentrating on three or four areas: "Firstly, education, people-to-people contact and scholarship programmes, and that sort of thing and, secondly, on the work we have been doing in Kaliningrad, supporting the economic and social integration of Kaliningrad into its new immediate neighbourhood. That has been a particular focus of the work of Mrs Ferrero-Waldner as Commissioner. We are also encouraged by the recent signs that the Russians themselves are ready to contribute to the Cross-border Cooperation Instrument which we have in place under the Neighbourhood Instrument and that, therefore, again, will be an important theme. Another area I would mention in the context of the Northern Dimension is our work on environment issues, particularly in the North of Russia and the Baltic Sea … We are also doing a number of things through our separate Human Rights Instrument in terms of supporting the rule of law, democracy and civil society in Russia, which I think is an increasingly important thing given the recent political developments" (Q 344).

The Common Economic Space

ECONOMIC LINKS

99.  The economies of Russia and the members of the European Union have become increasingly intertwined since the end of the Cold War (see boxes below). The overall aim of the Common Economic Space is the creation of an open and integrated market between the EU and Russia.[55] More specifically, the aim is to:

  • Increase opportunities for economic operators
  • Promote trade and investment
  • Facilitate the establishment and operation of companies on a reciprocal basis
  • Strengthen cooperation in different sectors of the economy
  • Reinforce overall economic cooperation and reforms
  • Enhance the competitiveness of the EU and the Russian Federation

Cooperation between the two sides is supported by business-to-business dialogue conducted within the EU-Russia Industrialists' Round Table (IRT).

100.  To help implement the Common Economic Space, a "Road Map" agreed in 2005 sets out objectives and areas for cooperation in the short and medium term. Fourteen EU-Russia dialogues have been established covering most economic sectors as well as a number of regulatory dialogues which aim to promote gradual approximation of legislation. EU-Russia relations with regards to energy are dealt with in chapter 5.

BOX 6
The Russia and the EU: Close Trading Partners

Russia is the EU's third most important trading partner, after the USA and China. It accounted for 6.2% of the EU's exports in 2006, compared to 2.7% in 2000. Germany was by far the largest exporter to Russia in 2006, with 36% of the total, followed by the Netherlands and Italy. Britain came sixth (after France and Poland). Germany was also the largest importer, followed by the Netherlands and Italy. The main exports to Russia from the EU are machine tools, transport equipment, agricultural products and textiles.

The European Union's imports from Russia amounted to 10.4% in 2006, compared to 6.4% in 2000. 52% of Russian exports—mostly in oil, gas, and raw materials—go to the European Union: imports of energy products from Russia rose from €36 billion in 2000 to €94 billion in 2006. The EU is, with more than 60% of the total, the largest foreign investor in Russia. In 2006 the EU exported services worth €13 billion to Russia, and imported services worth €10 billion.[56]


RUSSIAN ACCESSION TO THE WTO

101.  The work in the Economic Space is, among other things, part of the preparation for the closer relationship between Russia and the EU which will flow from Russian membership of the World Trade Organisation (WTO); and it also helps to smooth the way towards an eventual EU-Russia free trade area.

102.  Mr Putin remains committed to Russian membership of the WTO. The negotiations began in 1993, and are now largely completed. Bilateral disputes with Georgia and Poland—not directly connected with the substance of the negotiation—have delayed the process. Although in principle the European Union has already agreed to Russian entry, there remain objections by European Union countries over such trade issues as the Russian regime for timber exports to Finland.

103.  The arguments which the advocates of Russia's WTO membership inside and outside Russia put forward in favour of membership are that even its prospect has encouraged Russia to continue with market reform; that it would give Russian exporters better access to markets; that it would make it more difficult for importing countries to mount successful anti-dumping and other protectionist measures against imports from Russia.

104.  However some Russian industrialists believe that opportunities in foreign markets would not compensate them for the increased competition they would face at home. Some of those we spoke to in Moscow believed that the obstacles being put in the way of Russia's early entry were politically motivated. Sir Andrew Wood (former British Ambassador to Russia) also commented that the Russians had often seen WTO entry as a political matter with their exclusion being politically motivated (p 191). Vladimir Mau in Moscow said that the Russian debate was now thoroughly confused. Yegor Gaidar agreed that Russians were strongly divided and a number of senior people thought that membership would not be to Russia's advantage. He warned that the issue could not be used by the European Union as a negotiating lever.[57]

105.  Professor Lieven (King's College, London) thought, by contrast, that the WTO was one area where the West had a real capacity to bring pressure to bear on Russia—not as strong as some in the West thought because, he agreed, "the Russians are more ambiguous on the subject than may initially appear." Some Russian small businessmen were doubtful about WTO membership from their point of view: "but the Russian top leadership, being dedicated to Russian exports, really is interested in the WTO" (Q 191).

106.  The European Union should actively promote the widest possible engagement of Russia in international and multilateral institutions; it should resist any attempt to remove Russia from the G8; it should call for the early entry of Russia into the WTO. Any remaining minor disputes can be dealt with under the WTO's dispute resolution mechanisms after Russia has joined the WTO. The European Union should in due course promote Russia's membership of the Organisation for Economic Cooperation and Development (OECD).

107.  One area where the EU might engage the Russians with greater enthusiasm is climate change. Sir Anthony Brenton, British Ambassador to Russia, told us that an important aspect of EU-Russia relations and negotiations are on international action on climate change: "if the world is to have successful negotiations, … getting Russia on board will be a very important part of those negotiations." He did not think either the UK or the EU had done this very well so far. The Russians were difficult on the subject; their scientists were not entirely convinced and in Russian business circles some thought that while they were doing so well from oil and gas a global regime which limited demand for oil and gas was probably not going to be a very good thing for Russia. Russia is a large, cold country and others thought that a rather warmer world would be good place from Russia's point of view. Because the EU and Russia did not see eye to eye on the subject, there was a strong argument for the EU and the UK to engage seriously with Russia on the subject (Q 243).

CLIMATE CHANGE

108.  Mr Jim Murphy MP, Minister for Europe, in his letter to the Committee of 15 April 2008 (p 137), confirmed that climate change would have an impact on the EU's relations with Russia. He noted that it is essential that the EU-Russia dialogue on climate and energy "helps us understand and take account of each other's interests". The UK needs to work with Russia bilaterally and through the EU and other international organisations on securing an "equitable and ambitious" post-2012 agreement under the UN Framework Convention on Climate Change (UNFCCC) process. He confirmed that the draft negotiating mandate for a successor to the PCA covers climate change, as well as conflict prevention and resolution; and security cooperation between the EU and Russia: "this could include conflicts caused, worsened or prolonged by the effects of climate change".

109.  It is in the interests of the EU to engage the Russians on climate change to a greater degree than at present, despite the Russian reluctance to engage fully.

The Common Space of Freedom, Security and Justice

110.  Cooperation in the Space of Freedom, Security and Justice is good, as there is a strong common interest, and the Russian Minister of Justice, Vladimir Vasilyevich Ustinov, and Russian Minister of the Interior, General Rashid Nurgaliyev, as well as the key Presidential Adviser, Mr Viktor Ivanov, have all been involved. One of the recent fruits of this cooperation is the respective agreements on visa facilitation and re-admission which entered into force on 1 June 2007. The visa facilitation agreement provides for simplified procedures for issuing visas which will make it easier for citizens to travel between EU countries and Russia. The readmission agreement concerns the return of Russian, EU Member State and third country nationals illegally residing in the territories of the EU Member States or Russia. The Commission views the obligations set out in this agreement as "an important tool to prevent and tackle illegal immigration."[58] Eneko Landaburu, Director-General for External Relations in the European Commission, said: "… the movement of people … is another big and important issue … Now we have a tool, an instrument, in order to co-operate and try to implement a policy on the mobility of people ... We will need to improve the provisions of these agreements … Russia is pushing to have the free movement of people without visas." The Commission were somewhat reluctant because they had to take into consideration a number of elements, including security (Q 270).

111.  Fighting terrorism and organised crime is a priority of cooperation in the area of security. The Commission promotes compliance with international law through political dialogue and technical assistance, and exchanges of information and best practice take place at meetings between the EU Counter Terrorism Coordinator and the Russian Special Presidential Envoy as well as at expert level. Cooperation also covers the areas of money laundering, drugs, trafficking in human beings and corruption. Regarding law enforcement, the EUROPOL-Russia Cooperation Agreement of 2003 provides for the exchange of strategic information which helps in the fight against organised crime. The EU and Russia also cooperate on judicial matters.[59] The EU supports judicial reform in Russia, notably in areas such as the training of judges and the modernisation of the court system. (See paragraph 75 above).

112.  In 2005 Russia and the EU agreed to establish regular human rights consultations. These cover dialogue on human rights issues in Russia and the EU as well as EU-Russia cooperation on human rights within international forums. The EU has supported the development of democracy, the protection of human rights and civil society in Russia, notably through the European Initiative for Democracy and Human Rights (EIDHR). The approach of the EU to these issues is discussed more fully in chapter 7.

113.  Three specific questions have arisen which can be considered under the Second Common Space: Kaliningrad, ethnic Russians in the Baltic States and extraditions cases between the UK and Russia.

114.  A post-Schengen agreement was negotiated on transit through Lithuania for Russians travelling to and from Kalinigrad (See Box 7 below). It came into force in July 2003 and met most of the needs of both parties. It showed that Russia and the EU could hammer out practical agreements when both sides had much to gain from success, and much to lose from failure. It also demonstrated to the Russians, somewhat perhaps to their surprise, that EU solidarity worked, and that they could no longer impose their will on their smaller neighbours if the competences and responsibilities of the European Union were involved. To that extent it was an encouraging and educational model for the future.[60]

BOX 7
Kaliningrad

The region of Kaliningrad is a Russian exclave in the northern part of what used to be East Prussia. The region was assigned to the Soviet Union after 1945, and its German inhabitants who fled were replaced by Soviet citizens. As long as Lithuania was still part of the Soviet Union, civilian and military traffic from Russia to Kaliningrad passed through Lithuania without constraint.

After Lithuania became independent, visa-free transit of Russian citizens through Lithuania was regulated by bilateral agreement. In 2001, according to Russian figures, the number of crossings through Lithuania between Russia and Kaliningrad was 960,000 by train and 620,000 by car.[61]

As part of its membership of the European Union Lithuania had to apply the Schengen provisions, which involve the abolition of border controls between Member States, and as a corollary to erect them against countries with which they had formerly had bilateral border arrangements. This meant that Russian citizens would in future require a visa to enter or pass through Lithuania. Apart from the practical problems, this became a matter of prestige for the Russians, who expressed much public outrage that they would now need the permission of a foreign state simply to travel to another part of their own country. For their part the Lithuanians feared that their interests would be compromised by the European Union in the interests of maintaining good relations with Russia.


115.  The second case concerns human rights issues which the Russians raise with the EU. The Russians complain that the ethnic Russian populations of the Baltic States have been denied the full rights of citizens. There are good historical reasons why the presence of large Russian minorities are a very sensitive matter for the Baltic peoples. The European Union can help to ensure that ethnic Russians living in the Baltic States are given equal treatment under both national and EU law. The EU can help to manage these understandable sensitivities.

116.  The third question relates to extradition which currently affects the UK's relations with Russia directly because of the cases of Boris Berezovsky and Andrei Luguvoi. Berezovsky is a wealthy Russian who fled to the UK in 2000 and has publicly stated his opposition to the Russian regime. The Russian government has sought his extradition from the UK, but the British Courts have on several occasions refused this request on the ground that he would not be guaranteed a fair trial in Russia.

117.  The British authorities, for their part, have requested the extradition of a Russian citizen, Andrei Luguvoi, who is alleged to have assassinated Alexander Litvinenko in London. Alexander Litvinenko formerly served in the KGB and then as a Lieutenant-Colonel in the Federal Security Service (FSB) specialising in counter-terrorism and infiltrating organised crime. He was also Boris Berezovsky's bodyguard for a time. Litvinenko was granted British citizenship in 2006. He met the Russians Andrei Luguvoi and Dimitry Kovtun in a London restaurant on 1 November 2006 and died on 23 November from poisoning with the radioactive agent Polonium-210.

118.  The Russian authorities have refused to extradite Andrei Luguvoi on the basis of article 61 of the Russian Constitution, which bars the extradition of Russian citizens. This led to the UK taking a series of measures announced by the Foreign Secretary in the House of Commons on 16 July 2007, including the expulsion of four Russian diplomats and other measures, which were in turn followed by several Russian measures.

119.  On 18 July, the EU presidency issued a statement expressing "disappointment at Russia's failure to cooperate constructively with the UK authorities" and urging "urgent and constructive cooperation by the Russian Federation on this matter … which raises important questions of common interest to EU Member States".

120.  We welcome the solidarity that the EU has shown with the UK on the question of the extradition of Andrei Luguvoi.

121.  In the last few years, progress has been made in several areas of EU-Russia cooperation on justice and home affairs issues. However, serious questions remain about the commitment of the Russian authorities to the rule of law and the independence of the judiciary, especially in politically sensitive cases. The EU should continue in its efforts to promote Council of Europe, OSCE and other relevant standards with regard to the rule of law, the independence of the judiciary, and judicial processes in Russia. These are standards which Russia has accepted and is committed to upholding.

The Fourth Common Space: Research and Education, including Culture

122.  The EU and Russia have agreed as part of the Common Space on Research and Education, including Culture, to build stronger ties in this field. Russia is the most successful country in taking up the possibilities of research cooperation with the EU: there are currently 220 projects worth some €2.3 billion, to which the Russians have contributed. This reflects the work currently going on in the framework of this Common Space. Michael Davenport of the Foreign and Commonwealth Office said that cultural exchanges and language teaching were very important areas for cooperation with Russia, though he pointed out that the teaching of Russian language, literature and culture in the UK has "collapsed" (QQ 32-34). This is a pity as, according to Professor Lieven (King's College, London), the Russians are obsessed by the notion that Russian has to remain an international language. He thought there was a "reasonable chance" that the Russian language would remain "the biggest medium of exchange, discourse, business, culture, between the states of the former Soviet Union" (Q 201).

123.  Sir Roderic Lyne, formerly British Ambassador to Russia, echoed Michael Davenport's views with regards to the importance of education and cultural exchanges: "I think a lot of the EU's effort in Russia should be put into areas relating to education, and I have always argued that in discussions with the EU, because I really do think that investing in the next generation in Russia is probably the most helpful thing we can do" (Q 143). A concurrent opinion was expressed by Charles Grant, Director of the Centre for European Reform: "I believe that the EU Erasmus Mundus programme does have links with Russian universities but I am quite sure that it should do much more […] I agree with [Sir Roderic Lyne] that the more contact we can establish with younger people the better" (Q 143).

124.  However, the positive atmosphere on cultural issues generally has been marred by the dispute that arose between the UK and Russia, regarding the legal basis for the operations of the British Council in Russia. The position of the Russian government is that the activities of the British Council lack a proper legal basis although Ambassador Fedotov confirmed that the Russian government does not have any concerns about what the British Council is doing in Russia (Q 422). According to the British Government, the assertion about the lack of legal basis of the Council's operation is simply untrue and they characterise Russia's action against the British Council offices and staff in St Petersburg and Ekaterinburg as "illegal" (written evidence, Jim Murphy letter of 18 February 2008).

125.  The issue is apparently being used as a negotiating chip by the Russian government, which has sought to link it to other issues, a move which the UK Government has strongly resisted (written evidence, Jim Murphy letter of 18 February 2008). On 21 December 2007 the EU declared its support for the British position by issuing a Declaration expressing its concern and urging the Russian authorities to "revisit their decision concerning the closing down of the offices of the British Council …"[62] Other bilateral cultural institutions of EU Member States have not been affected.

126.  We deplore the attacks on the British Council and its staff and consider that they are not motivated by its activities, but are a part of a wider political strategy to pressurise the UK and the EU into giving ground on other, unrelated issues. Russia's approach is unacceptable and violates several bilateral and multilateral agreements that Russia has ratified. It is moreover not consistent with a desire to make genuine progress under the Fourth Common Space. The Russian position that this is a purely bilateral matter between them and the UK is neither convincing nor sustainable. The EU should continue to support British efforts to find an early solution over the status of the British Council.

127.  We welcome the efforts by the EU and Russia to further research cooperation under the Fourth Common Space. The European Union should continue actively to facilitate all forms of contact with the Russian people, including the provision of scholarships and exchanges and the further simplification of visa procedures for students. EU Member States, and in particular the UK, should encourage the teaching of the Russian language in its schools and universities.


52   In March 2008 the European Commission services published a progress report on the implementation of the EU-Russia Common Spaces for 2007. It covers the Common Spaces on 'Trade and Economic cooperation'; 'Freedom, Security and Justice', and 'Research, Education and Culture'. The Common Space of 'External Security' concerns principally matters relating to the Common Foreign Security Policy (CFSP) and is not covered by the progress report. Back

53   The Foreign Minister of the EU Member State holding the rotating presidency, the High Representative for CFSP and the Commissioner for External Relations. Back

54   Launched by the European Community in 1991, the Tacis Programme provides grant-financed technical assistance to 12 countries of Eastern Europe and Central Asia and mainly aims at enhancing the transition process in these countries. Back

55   European Commission, "The European Union and Russia: Close Neighbours, Global Players, Strategic Partners", DG External Relations, Brussels, 2007. Back

56   Commission document on EU-Russia Relations (at http://ec.europa.eu/external_relations/russia/intro/index.htm.) Back

57   Meetings, Messrs Yegor Gaidar, Vladimir Mau and Yevgeni Primakov, Moscow, 12 December 2007, see Appendix 4. Back

58   Op. cit. p.14.  Back

59   European Commission, "The European Union and Russia: Close Neighbours, Global Players, Strategic Partners", DG External Relations, Brussels, 2007, p.15. Back

60   Article, Centre for European Policy Studies, Kaliningrad's Borders and Transit to Mainland Russia, 19 February 2007, at http://enarpri.org/Article.php?article_id=264; Article, Transit to/from Kaliningrad Region, http://www.euro.lt/en/lithuanias-membership-in-the-eu/transit-from-to-kaliningrad-region/. Back

61   Centre for European Policy Studies, Kaliningrad's Borders and Transit to Mainland Russia: Practicalities and Remaining Bottlenecks, February 2005, http://enarpri.org/Article.php?article_id=264  Back

62   Declaration issued by the rotating Presidency of the European Union, Brussels, 21 December 2007, doc. 16847/07. Back


 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2008