DGAPanalyse 8 | July 2012
by Jarosław Ćwiek-Karpowicz
The influence of soft power is very difficult to measure. It is associated with intangible resources such as culture or ideology, as well as the ability to use them skillfully in order to gain allies through attraction rather than coercion or payments. After the collapse of communism, Russia retained a huge military potential from the Soviet Union but largely lost its cultural and ideological appeal. Therefore, in order to rebuild its external attractiveness (at least in the post-Soviet space), Russia began to develop its foreign policy according to soft power principles. But Russian policy-makers misinterpreted the concept of soft power. They failed to appreciate the idea of partnerships with clear advantages for both sides in the near and long term. Instead, Moscow perceives soft power as the capacity to influence, or even manipulate, public opinion in target countries.
Thursday, November 8, 2012
Should the Transnistrian tail wag the Bessarabian dog?
Kozak Memorandum: Russia’s failed proposal for a Federal Republic of Moldova
The
strategic, geo-political future of Moldova is on the table of the Maastricht meeting of the
OSCE foreign ministers on 1-2 December. Literally on the table is a draft
constitution of a Federal Republic of Moldova proposed by Russia,
following years of unfruitful negotiations sponsored by the OSCE to resolve the
problem of Transnistria’s unrecognised secession. The text is being promoted
diplomatically by Dmitri Kozak, a senior figure on President Putin’s staff. The
proposal is in parts passable professionalism in the writing of federal
constitutions, except that it is distorted by a blatant attempt at power
politics to secure for Russia leverage over the whole of Moldova via the proxy
role of little Transnistria. The Russian initiative also blatantly bypasses the
OSCE, which was meant to have a key mediating role.
Moldova, Bessarabia and Transnistria
Bessarabia is usually understood to be the territory bounded by two big rivers
flowing into the Black Sea, the Dniestr to the
north and the Prut to the south. In 1812 Bessarabia was annexed by Russia, but in the wake of the
Russian revolution it was able to declare independence in 1918 and unite with Romania. In
1940 the USSR
annexed Bessarabia and united it today’s
Transnistria – a very thin piece of land stretching over 200 kilometres along
the left bank of the Dniestr - to form the Moldovan Soviet
Socialist Republic.
The Stalin regime deported about 500,000 Moldovans in the period 1944-1959,
while bringing in about 300,00 Russians, the majority settling in Transnistria.
In August 1991 Moldova
declared its independence upon the collapse of the USSR with, but Transnistria was at
the same time seceding from Moldova
to remain loyal to collapsing USSR,
or at least Russia.
This led to a short war in 1991-1992, in which the 14th
Soviet/Russian army prevailed over the weaker Moldovan forces. Russian troops
have protected Transnistria’s de facto secession ever since, despite
commitments made to the OSCE to withdraw them.
Russia’s proposal
for a Federal Republic of Moldova
This
Russian text proposes the basic principles of a new constitution for what would
become the Federal Republic of Moldova, consisting of a federal territory and
two ‘subjects’ of the Federation – the Transnistrian Moldovan Republic
(Transnistria) and Gagauzia. The federal territory would consist of the rest of
Moldova,
excluding these two subjects[2].
The term ‘asymmetric federation’ is being used to describe this proposal, since
the federal territory and the two subjects would not have equal status. The
federal government would be responsible for both the federation’s competences
and government of the federal territory.
The
idea of an asymmetric federation is plausible where the entities are of very
unequal size. One can consider as other examples of asymmetric federations the
cases of Spain
and the United Kingdom,
where Catalonia
and Scotland
respectively have special autonomy compared to the rest of Spain or England. By contrast
Belgium
is a symmetrical federation, with equal status for the two main communities and
regions, and with separate federal and regional tiers of government.
Transnistria has in the past argued for equal status with the rest of Moldova, like Northern Cyprus also, but the Russian proposal has
shifted Transnistria off this position.
For
the Federal Republic of Moldova it is proposed that the competences of
government be divided into three categories: those of the federation, those of
the subjects, and joint competences. There are a large number of important
joint competences, as opposed to exclusive competences for each tier of
government. This large number of joint competences is a recipe for indecisive
or blocked governance, and must be considered a weakness in the proposal.
However
this weakness is all the more serious when taken together with the electoral
and voting rules proposed for the senate. The legislature would have two
houses. An orthodox lower house, elected by proportional representation, would
pass legislation by simple majority. However all laws would also need the
assent of the senate, whose representation would be highly disproportionate: 13
senators elected by the federal lower house, 9 by Transnistria and 4 by
Gagauzia. An alliance of the two subjects could block any law. However the
voting strength of Transnistria would be even stronger since its
representatives in the federal parliament could use their votes to elect some
more senators from Transnistria.
This
disproportion would be even more serious still during a transitional period
lasting until 2015, before which federal ‘organic laws’ could only be passed
with a ¾ majority in the senate, where Transniestria would have 34% of the
seats, and therefore an outright blocking minority.
There
is a similar story for the Federal
Consitutional Court, which would have 6 judges
appointed by the lower house, 4 by Transnistria and 1 by Gagauzia. Until 2015
decisions by the court would require no less than 9 votes, giving again an
outright blocking minority to Transnistria.
The
voting rules are differentiated as between ‘organic laws’, which regulate joint
competences and ‘ordinary laws’, which regulate federal competences. Both types
of laws may be passed by simple majorities of the two houses. Vetos by the
senate of ordinary laws may be overridden by a two-thirds majority in the lower
house, but vetos of organic laws may not be overridden. Changes in the
constitution would require a 4/5 majority in the senate.
Problem
The potential blocking
power of the Transnistrian minority is the essential issue. It is usual for
constitutions dealing with problems of secession to give a strongly protected
position to the minority groups. It is invariably a highly delicate matter to
find a workable balance between the
majoritarian principle and that of consensus, or veto powers. However the
Russian proposal manifestly goes much too far in giving blocking powers to
Transnistria. The problem is all the more serious given that the leadership of
Transnistria is an authoritarian regime, backed by omnipresent secret services,
which has also acquired an extremely bad reputation for illegal trafficking
business of all kinds (drugs, weapons, people).
It not usual in asymmetric
federations to grant extensive blocking powers to autonomous entities that
represent only a small fraction of the total population. For example neither Catalonia nor Scotland can
block legislation in the Spanish or UK legislatures, where there is no
doubt over the democratic credentials of these autonomies. The normal model is
that autonomies enjoy the free exercise of their exceptional powers within
their territory, and for their autonomy to be constitutionally guaranteed, but
not otherwise to have special powers over federal legislation. Even in the case
of Belgium,
with absolute political equality between the two main communities, there is
only a restricted category of legislation that requires more than a simple
majority, and allowing for a veto by one community.
One way of improving the
present proposal would be to reduce drastically the number of joint
competences, and thus the scope of the blocking power of the minorities. This
would be crucial for Moldova’s
European perspectives, since integration with the EU ultimately involves a
large amount of legislation in domains that would be joint competences
according to the Russian proposal. If Transnistria wanted to block Moldova’s
European integration ambitions it could easily do so.
A complementary method
would be to have a much less disproportionate representation in the senate,
and/or to have less high qualified majority voting threshholds.
It would be more
appropriate to reverse the logic of the proposed transition period that gives
Transnistria exceptional blocking powers until 2015. The alternative would be
for Transnistria not to have exceptional minority powers in the federal
legislation until and unless the regime had become sufficiently democratic,
which the OSCE might monitor.
Reactions
President
Smirnov of Transnistria has characterised the document as a compromise able to
normalise relations between Moldova
and Transnistria. However he also wants military guarantees, which are not
mentioned in the proposal[3].
He wants a Treaty providing for a Russian military deployment in Moldova for 30
years[4].
President
Voronin of Moldova
was initially been quoted as giving qualified support for the proposal:
“Moldovan society will succeed in finding the optimal solution after studying,
discussion and improvement of this document”[5].
However
several Moldovan opposition parties held an extraordinary session of their
Permanent Round Table on 24 November, advocating rejection of the Russian
proposal, insisting on unconditional withdrawal of Russian troops from
Transnistria, and on EU, US, Romanian and Ukrainian participation in the
process. A group of 20 non-government organisations and think tanks signed
on 21 November an appeal to the EU, US,
Romania and Ukraine to use their influence to stop the Russian proposal, which
“purporting to ‘resolve’ the Transnistria conflict … would destroy our state
and the existing feeble elements of democracy here”. Students have been
demonstrating in the streets of Chisinau, brandishing banners such as ‘Putin,
don’t forget, Bessarabia is not yours’[6].
The
OSCE did not participate in the drafting of the proposal and saw it for the
first time on 14 November, before it was formally presented to the principal
parties on 17 November. On 24 November a press release of the OSCE indicated
that its Chairman-in-Office, the Dutch foreign minister, had told President
Voronin that there was no consensus among OSEC member states to support the
Russian proposal, which could be an understatement.
Dmitri
Kozak for Russia
has said that “leaders of the Republic
of Moldova and of
Transnistria are to approve, as soon as possible, the draft of the memorandum”.
However he has added that “not all points from the memorandum are ideal and
acceptable”[7]. Kozak
also disingenuously sought to clothe his proposal with the European flag.
“Without settlement of the Transnistrian problem, the Republic of Moldova
will be unable to integrate with the European Union. If the country will unify,
then this perspective will appear”[8].
But that would depend also upon seriously amending his proposal for the
Moldovan constitution, which Mr Kozak presumably appreciates.
On
24 November the Moldovan presidential press service announced that President
Putin would be visiting Moldova
on Tuesday 25 December, expecting that the Kozak memorandum would be signed
that day with President Voronin. On 25 November it was announced that President
Putin’s visit had been cancelled.
President
Voronin issued a statement on 25 November that: “The plan proposed by the Russian federation
is a response to a true compromise between the sides. … However the document is
of such strategic importance cannot be adopted against the resistance of one or
another side. … Obviously, Moldova’s
European integration option requires the support of the European organizations,
in particular of the OSCE for this settlement plan. … Under these conditions Moldova’s
leadership describes the signing of this memorandum as premature before the
coordination of its text with the European organizations”[9].
Mr
Kozak was reported on 25 November as describing Voronin's refusal to give green
light to the memorandum as “illogical”, and “lacking in political courage"
and "political irresponsibility".
Options for Moldova
There
are choices to be made by all interested parties, first of all by President Voronin
of Moldova,
who might be reflecting on three possible scenarios.
A/
The first one would be to accept the Russian proposal without significant
improvement, only to find his country becoming political hostage to the veto
powers of an undemocratic Transnistria indefinitely, or at least until 2015. In
this case he would be overriding strong opposition at home, which is of course
highly undesirable for any such constitutional act.
B/
The second scenario would be to succeed in getting sufficient improvements in
the memorandum, and then go ahead with re-unification, which could be supported
then by all the international community as well.
C/
The third scenario would start with an attempt to try to get the essential
improvements, which however Russia
and/or Transnistria do not agree to. In this case Moldova would suspend the
negotiations and aim instead at an accelerated Europeanisation, making an
agreement with the European Union to join seriously the South East European
integration train without Transnistria. This should lead to improving
perspectives for Moldova
(Chisinau). The Transnistria regime, which is already in a desperate condition,
would further decline and ultimately, maybe in a few years time, collapse.
Thereafter re-unification negotiations could resume under more favourable
conditions for Moldova
with a new and maybe democratic Transnistrian regime.
The
EU, US and Russia
may also be reflecting on these three main possibilities. The EU could do well
to make its position clear and credible. Its argument could be in two steps.
First, essential improvements to the Russian proposal are necessary for Moldova to have
a future in Europe. Second, if the Russian and
Transnistrian sides are unreasonable in resisting these, the EU would offer to
Moldova (i.e. Chisinau alone) an immediate step into the Stabilisation and
Association Agreement process, with perspectives of ultimate EU membership
equal to those already extended to the rest of South East Europe, and without
preconditions over reunification of Moldova. The EU would also offer
conditional incentives to Transnistria, but the conditions would amount to a
regime change there. The US
would presumably support this proposed EU strategy.
The
choice is also for Russia,
whether to persist in backing a biased and defective constitution, or rather
support a democratising, modernising and Europeanising concept for the whole of
Moldova
with a better proposal, and so to enter into a new phase of cooperation with
the EU, the US
and the OSCE as a whole in the overlapping near abroads. Already the story is
one of Russia having grossly overplayed its hand in trying to bulldozer through
a proposal that meets serious opposition in Moldova itself, and dismay in the
West over both the method and content of its diplomacy.
25 November 2003
[1]
Associate Senior Research Fellow, Centre for European Policy Studies (CEPS).
[2]
Uptodate population figures are not available. The 1989 census gave a total
population for all of Moldova
(including Transnistria and Gagauzia) of 4,335,000, of which 13% were Russian.
Transnistria is estimated to have a population today somewhere between 500,000
and 700,000, of which 40-45% are Moldovan, 25% Russian, and 25% Ukrainian. The
population of Gagauzia is thought to be about 155,000. Since 1989 the total
population is estimated to have declined by about 500,000.
[3]
OSCE Mission to
Moldova,
News Digest, 18 November
2003.
[4]
OSCE Mission to
Moldova,
News Digest, 21 November
2003.
[5]
OSCE Mission to
Moldova,
News Digest, 20 November
2003.
[6] OACE Mission to Moldova, News
Digest, 25 November 2003
[7]
OSCE Mission to
Moldova,
News Digest, 18 November
2003.
[9] OSCE Mission to Moscow, News Digest, 25 November 2003
Sunday, November 4, 2012
Could Transnistria block Moldova's integration with the EU? | Centre for Eastern Studies
Could Transnistria block Moldova's integration with the EU? | Centre for Eastern Studies
The signing of the Association Agreement, which is scheduled for the autumn of 2013, will be an important step towards Moldova’s integration with the EU. Both sides assign great importance to the speediest possible finalisation of the Agreement, and so far the negotiations have been described as progressing very smoothly. Transnistria’s highly sceptical attitude towards its possible accession to the DCFTA, however, is consistent with the interests of its main ally, Moscow. It is highly probable that Russia intends to thwart Moldova’s EU association process. Moscow’s objective seems to be to draw Moldova permanently into its own sphere of influence, and therefore it perceives Chisinau’s movement towards the EU as a transgression against its geopolitical interests. Consequently, in order to hinder this process, Russia may instrumentally exploit its extensive influence over Transnistria to provoke a crisis between Tiraspol and Chisinau. An apparent increase in Russian presence in the region over the last few months (including tighter control over Transnistria’s KGB and the Ministry of Information) may suggest that the Kremlin is preparing to implement such a scenario.
The current state of the EU-Moldova DCFTA negotiations
The DCFTA negotiations between Moldova and the European Union were launched in March 2012, and three rounds of talks have already been held. The constructive attitude demonstrated by Moldova has allowed the negotiating teams to quickly settle a number of difficult issues (trade in goods, customs and trade facilitation, public procurement and energy), which indicates that Moldova wishes to complete the negotiations and sign the Association Agreement in the autumn of 2013. Declarations coming from Brussels also suggest that this is a realistic time frame. Although the final Association Agreement will require ratification by all EU member states (which could take up to two years), an interim implementation clause is likely to be adopted for the DCFTA. The implementation of the DCFTA will bring about a deepening of economic integration of Moldova with the EU, and the adoption by Moldova of part of the EU acquis, which is seen as a crucial instrument in the modernisation of the country.
DCFTA and Transnistria
Currently, there are no reasons to believe that Transnistria might change its position and join the ongoing DCFTA negotiations. This in turn means that the region will not be covered by the agreement. Despite encouragement from Brussels and Chisinau, Tiraspol has so far refused to participate actively in the talks and has merely delegated to it a low-ranking observer. This means that Transnistria is de facto not taking part in negotiating matters that are of direct interest to Transnistrian exporters (export quotas, customs tariffs, transition periods, etc). Transnistrian government officials and local experts have argued that accession to the DCFTA would actually be economically harmful to the region, and that implementing the EU acquis would run against the grain of Tiraspol’s policy of legal harmonisation with the Russian Federation. One gets the impression that Transnistria refuses to participate in DCFTA negotiations in order to argue later that the new trade regime has been introduced unilaterally, without consultation with Tiraspol, and without taking its interests into account. Transnistria might even hope that as a result of its refusal to join the DCFTA, the EU will suspend the signing of the DCFTA agreement with Moldova.
Currently, Transnistrian companies are able to export goods to the EU market under the Autonomous Trade Preferences granted to Moldova by Brussels in 2007. As a result, the EU market absorbs as much as 30-50% of Transnistria’s total exports[1]. However, if Chisinau signs the DCFTA agreement, the ATP regime will be automatically discontinued. Its further application for Transnistria alone will not be possible for legal reasons; since the Transnistrian government lacks international recognition, it cannot be a party to any legally-binding agreement with the European Union. Consequently, once the DCFTA has been implemented, EU customs tariffs on Transnistrian exports will rise by 10-17%, which will have a serious impact on the region’s economy.
Russia’s position on a DCFTA for Moldova
The signing and implementation of the DCFTA agreement will result in a high degree of economic and legal integration between Moldova and the EU (through the implementation of large parts of the EU acquis), which in turn will make it impossible for Moldova to participate in regional integration projects in the post-Soviet area (i.e. the Customs Union and the planned Eurasian Union), and thus frustrating the implementation of Moscow’s openly declared strategic policy goal in Moldova.[2] The Russian political elite remains convinced that Moldova naturally belongs in the Eurasian integration projects. Importantly, fostering such projects is one of the main objectives of President Vladimir Putin’s foreign policy. Most likely, from the Kremlin’s perspective, it is not only the fate of Moldova which is involved, but also preventing the precedent of a successful integration of a CIS state with the EU (even if temporarily integration will remain incomplete, i.e. falling short of EU membership). Russia is particularly concerned about the effect such a precedent might have on Ukraine’s future political course. Therefore one should assume that Moscow may use Transnistria as an instrument for preventing closer ties between Moldova and the EU, and to provoke a political crisis between Chisinau and Tiraspol, using as a pretext Tiraspol’s loss of trade preferences following Moldova’s accession to the DCFTA.
An attempt to provoke such a crisis is all the more likely due to the perception, widely shared in Russia, that the current geopolitical situation and reality and the existing balance of power with the West, is favourable to Moscow, due to the deepening crisis within the European Union and the serious economic plight of other post-Soviet states. Therefore in Moscow’s view this might look like a propitious moment for undertaking actions that would permanently block integration between former Soviet republics and the European Union.
In the context of the scenario sketched out above, Russia’s tightening of control over the Transnistrian security forces (for instance, the new deputy head of Tiraspol’s KGB previously served as Dagestan’s deputy director of the Federal Security Service) and the Ministry of Information (which controls the local media) seems particularly significant. Over the last few months, visits to Transnistria by high-ranking Russian officials have become increasingly frequent; among the recent visitors were Dmitry Rogozin, the deputy prime minister and the Russian president’s special envoy to Transnistria (who is also responsible for the Russian defence industry) and Anatoly Serdyukov, Russia’s defence minister (a historical first). All these measures collectively can be seen as a preparation for a crisis in the region, the aim of which would be to block further integration between Moldova and the EU, and to send a signal to the West that Moscow will not suffer Brussels to unilaterally decide the future of countries from the so-called ‘shared neighbourhood’. Particularly striking in this context was a statement by Sergei Gubarev, Russian Foreign Ministry’s special envoy, who suggested during his visit to Tiraspol in mid-October that Transnistria could be allowed into the Customs Union, and that Russia might recognise the region’s independence should Moldova lose its sovereignty or neutrality.
EU proposals for Transnistria’s membership of the DCFTA
Both official and unofficial statements by EU officials indicate that the European Union assumes that the issue could be resolved by convincing Transnistrian businesses of the benefits of joining the DCFTA, and thus retaining their present access to the EU market. Brussels hopes that Transnistrian companies will be able to put sufficient pressure on Yevgeny Shevchuk to persuade him to join the on-going DCFTA negotiations. In addition, Brussels also seems to believe that the DCFTA offers such economic opportunities that it can serve as an instrument for persuading the political and economic elites in Tiraspol to show more flexibility and to arrive at a modus vivendi with Chisinau within a framework of a single Moldovan state. Therefore EU officials are approaching the DCFTA as a tool for facilitating the reunification of Moldova – both directly in economic terms and indirectly in political terms.
However, Brussels’ approach is based on wishful thinking and a faulty diagnosis of the current situation in the region. Transnistria depends heavily on Russian subsidies (both direct ones, such as financial transfers, and indirect ones, such as a free supply of natural gas from Russia), and in order not to lose this support, Shevchuk must strive to retain Moscow’s favour. In addition, the Transnistrian leader remains in conflict with the political milieu of the former president Igor Smirnov and is fighting for extra powers with the Transnistrian parliament, which is controlled by the opposition Obnovleniye party. Moreover, he remains at loggerheads with Transnistria’s largest company, Sheriff. In these conditions, Shevchuk cannot afford to ignore the Kremlin’s wishes. During his visit to Moscow in February of this year, Shevchuk declared that Transnistria was eager to participate in integration projects within the framework of the Customs Union; while in early June, he declared that Eurasian integration should be taken as the cornerstone of Transnistria’s national idea, and issued directives for the official foreign policy conception to be re-drawn accordingly.
Possible scenarios
It appears that the European Union does not have a contingency plan for a scenario in which Transnistria decides not to join the DCFTA. The EU also seems to be playing down the possibility that its actions (the offer and the signing of the DCFTA) could result in a serious crisis both in the region and in its relations with Moscow. Neither Brussels nor the governments of the individual EU member states are prepared (politically or conceptually) to say whether the EU is willing to allow for a crisis in its relations with Russia for the sake of pressing ahead with the implementation of its policy towards former Soviet republics.
Assuming the most likely scenario, that Tiraspol will continue to reject the EU’s invitation to join the DCFTA, Brussels will be left with the following three options:
Nonetheless, even if a customs border with Transnistria were successfully established, the significant limitations on Transnistrian exports to the EU following Moldova’s adoption of the the DCFTA would almost certainly create a situation similar to that witnessed in 2006. Then, after Ukraine had discontinued the practice of allowing Transnistrian goods through its border without Moldovan customs seals, Tiraspol declared that it was subject to an economic blockade, rather than allowing its firms to register in Chisinau and thus to enable them to continue their export operations (even though such an option was offered by Chisinau without subjecting the firms to double taxation). At the time Tiraspol preferred to provoke a crisis in its relations with Moldova to a ‘pragmatic’ solution. and it is unlikely that its reaction to a new change in its export operation regime will be different.
Second, by including Transnistria in the free trade area, the EU would knowingly create a ‘hole’ in its customs border by opening up the possibility that goods produced outside the DCFTA could freely enter the EU market. This is because Chisinau would not be able to inspect Transnistrian manufacturers in order to enforce the so-called Rules of Origin, which are designed to prevent the re-export of goods produced outside the DCFTA area into the EU. Consequently, the EU cannot extend DCFTA privileges to Transnistria, because it would not be able to ensure that Moldovan goods produced in Transnistria had not in fact been produced in China or Russia, for example, and only repackaged in Transnistria.
Could Transnistria block Moldova's integration with the EU?
|
Moldova’s progress in its negotiations on an Association Agreement with the European Union, with a Deep and Comprehensive Free Trade Area (DCFTA) as its key element, has become a source of tension between Chisinau and the breakaway Republic of Transnistria. An almost certain refusal by Transnistria to join the DCFTA, will deprive the region of the benefits it currently enjoys under the EU Autonomous Trade Preferences (ATP) worsening its already precarious economic situation.It is to be expected that the issue will become an additional source of tension between the two sides of the Transnistrian conflict, and might also have a negative impact on the EU-Russia relationship.The signing of the Association Agreement, which is scheduled for the autumn of 2013, will be an important step towards Moldova’s integration with the EU. Both sides assign great importance to the speediest possible finalisation of the Agreement, and so far the negotiations have been described as progressing very smoothly. Transnistria’s highly sceptical attitude towards its possible accession to the DCFTA, however, is consistent with the interests of its main ally, Moscow. It is highly probable that Russia intends to thwart Moldova’s EU association process. Moscow’s objective seems to be to draw Moldova permanently into its own sphere of influence, and therefore it perceives Chisinau’s movement towards the EU as a transgression against its geopolitical interests. Consequently, in order to hinder this process, Russia may instrumentally exploit its extensive influence over Transnistria to provoke a crisis between Tiraspol and Chisinau. An apparent increase in Russian presence in the region over the last few months (including tighter control over Transnistria’s KGB and the Ministry of Information) may suggest that the Kremlin is preparing to implement such a scenario.
The current state of the EU-Moldova DCFTA negotiations
The DCFTA negotiations between Moldova and the European Union were launched in March 2012, and three rounds of talks have already been held. The constructive attitude demonstrated by Moldova has allowed the negotiating teams to quickly settle a number of difficult issues (trade in goods, customs and trade facilitation, public procurement and energy), which indicates that Moldova wishes to complete the negotiations and sign the Association Agreement in the autumn of 2013. Declarations coming from Brussels also suggest that this is a realistic time frame. Although the final Association Agreement will require ratification by all EU member states (which could take up to two years), an interim implementation clause is likely to be adopted for the DCFTA. The implementation of the DCFTA will bring about a deepening of economic integration of Moldova with the EU, and the adoption by Moldova of part of the EU acquis, which is seen as a crucial instrument in the modernisation of the country.
DCFTA and Transnistria
Currently, there are no reasons to believe that Transnistria might change its position and join the ongoing DCFTA negotiations. This in turn means that the region will not be covered by the agreement. Despite encouragement from Brussels and Chisinau, Tiraspol has so far refused to participate actively in the talks and has merely delegated to it a low-ranking observer. This means that Transnistria is de facto not taking part in negotiating matters that are of direct interest to Transnistrian exporters (export quotas, customs tariffs, transition periods, etc). Transnistrian government officials and local experts have argued that accession to the DCFTA would actually be economically harmful to the region, and that implementing the EU acquis would run against the grain of Tiraspol’s policy of legal harmonisation with the Russian Federation. One gets the impression that Transnistria refuses to participate in DCFTA negotiations in order to argue later that the new trade regime has been introduced unilaterally, without consultation with Tiraspol, and without taking its interests into account. Transnistria might even hope that as a result of its refusal to join the DCFTA, the EU will suspend the signing of the DCFTA agreement with Moldova.
Currently, Transnistrian companies are able to export goods to the EU market under the Autonomous Trade Preferences granted to Moldova by Brussels in 2007. As a result, the EU market absorbs as much as 30-50% of Transnistria’s total exports[1]. However, if Chisinau signs the DCFTA agreement, the ATP regime will be automatically discontinued. Its further application for Transnistria alone will not be possible for legal reasons; since the Transnistrian government lacks international recognition, it cannot be a party to any legally-binding agreement with the European Union. Consequently, once the DCFTA has been implemented, EU customs tariffs on Transnistrian exports will rise by 10-17%, which will have a serious impact on the region’s economy.
Russia’s position on a DCFTA for Moldova
The signing and implementation of the DCFTA agreement will result in a high degree of economic and legal integration between Moldova and the EU (through the implementation of large parts of the EU acquis), which in turn will make it impossible for Moldova to participate in regional integration projects in the post-Soviet area (i.e. the Customs Union and the planned Eurasian Union), and thus frustrating the implementation of Moscow’s openly declared strategic policy goal in Moldova.[2] The Russian political elite remains convinced that Moldova naturally belongs in the Eurasian integration projects. Importantly, fostering such projects is one of the main objectives of President Vladimir Putin’s foreign policy. Most likely, from the Kremlin’s perspective, it is not only the fate of Moldova which is involved, but also preventing the precedent of a successful integration of a CIS state with the EU (even if temporarily integration will remain incomplete, i.e. falling short of EU membership). Russia is particularly concerned about the effect such a precedent might have on Ukraine’s future political course. Therefore one should assume that Moscow may use Transnistria as an instrument for preventing closer ties between Moldova and the EU, and to provoke a political crisis between Chisinau and Tiraspol, using as a pretext Tiraspol’s loss of trade preferences following Moldova’s accession to the DCFTA.
An attempt to provoke such a crisis is all the more likely due to the perception, widely shared in Russia, that the current geopolitical situation and reality and the existing balance of power with the West, is favourable to Moscow, due to the deepening crisis within the European Union and the serious economic plight of other post-Soviet states. Therefore in Moscow’s view this might look like a propitious moment for undertaking actions that would permanently block integration between former Soviet republics and the European Union.
In the context of the scenario sketched out above, Russia’s tightening of control over the Transnistrian security forces (for instance, the new deputy head of Tiraspol’s KGB previously served as Dagestan’s deputy director of the Federal Security Service) and the Ministry of Information (which controls the local media) seems particularly significant. Over the last few months, visits to Transnistria by high-ranking Russian officials have become increasingly frequent; among the recent visitors were Dmitry Rogozin, the deputy prime minister and the Russian president’s special envoy to Transnistria (who is also responsible for the Russian defence industry) and Anatoly Serdyukov, Russia’s defence minister (a historical first). All these measures collectively can be seen as a preparation for a crisis in the region, the aim of which would be to block further integration between Moldova and the EU, and to send a signal to the West that Moscow will not suffer Brussels to unilaterally decide the future of countries from the so-called ‘shared neighbourhood’. Particularly striking in this context was a statement by Sergei Gubarev, Russian Foreign Ministry’s special envoy, who suggested during his visit to Tiraspol in mid-October that Transnistria could be allowed into the Customs Union, and that Russia might recognise the region’s independence should Moldova lose its sovereignty or neutrality.
EU proposals for Transnistria’s membership of the DCFTA
Both official and unofficial statements by EU officials indicate that the European Union assumes that the issue could be resolved by convincing Transnistrian businesses of the benefits of joining the DCFTA, and thus retaining their present access to the EU market. Brussels hopes that Transnistrian companies will be able to put sufficient pressure on Yevgeny Shevchuk to persuade him to join the on-going DCFTA negotiations. In addition, Brussels also seems to believe that the DCFTA offers such economic opportunities that it can serve as an instrument for persuading the political and economic elites in Tiraspol to show more flexibility and to arrive at a modus vivendi with Chisinau within a framework of a single Moldovan state. Therefore EU officials are approaching the DCFTA as a tool for facilitating the reunification of Moldova – both directly in economic terms and indirectly in political terms.
However, Brussels’ approach is based on wishful thinking and a faulty diagnosis of the current situation in the region. Transnistria depends heavily on Russian subsidies (both direct ones, such as financial transfers, and indirect ones, such as a free supply of natural gas from Russia), and in order not to lose this support, Shevchuk must strive to retain Moscow’s favour. In addition, the Transnistrian leader remains in conflict with the political milieu of the former president Igor Smirnov and is fighting for extra powers with the Transnistrian parliament, which is controlled by the opposition Obnovleniye party. Moreover, he remains at loggerheads with Transnistria’s largest company, Sheriff. In these conditions, Shevchuk cannot afford to ignore the Kremlin’s wishes. During his visit to Moscow in February of this year, Shevchuk declared that Transnistria was eager to participate in integration projects within the framework of the Customs Union; while in early June, he declared that Eurasian integration should be taken as the cornerstone of Transnistria’s national idea, and issued directives for the official foreign policy conception to be re-drawn accordingly.
Possible scenarios
It appears that the European Union does not have a contingency plan for a scenario in which Transnistria decides not to join the DCFTA. The EU also seems to be playing down the possibility that its actions (the offer and the signing of the DCFTA) could result in a serious crisis both in the region and in its relations with Moscow. Neither Brussels nor the governments of the individual EU member states are prepared (politically or conceptually) to say whether the EU is willing to allow for a crisis in its relations with Russia for the sake of pressing ahead with the implementation of its policy towards former Soviet republics.
Assuming the most likely scenario, that Tiraspol will continue to reject the EU’s invitation to join the DCFTA, Brussels will be left with the following three options:
- Chisinau agrees to a customs border between Moldova and Transnistria
Nonetheless, even if a customs border with Transnistria were successfully established, the significant limitations on Transnistrian exports to the EU following Moldova’s adoption of the the DCFTA would almost certainly create a situation similar to that witnessed in 2006. Then, after Ukraine had discontinued the practice of allowing Transnistrian goods through its border without Moldovan customs seals, Tiraspol declared that it was subject to an economic blockade, rather than allowing its firms to register in Chisinau and thus to enable them to continue their export operations (even though such an option was offered by Chisinau without subjecting the firms to double taxation). At the time Tiraspol preferred to provoke a crisis in its relations with Moldova to a ‘pragmatic’ solution. and it is unlikely that its reaction to a new change in its export operation regime will be different.
- The EU suspends the signing of the DCFTA agreement with Chisinau
- The EU agrees to grant Transnistria all the privileges afforded by the DCFTA
Second, by including Transnistria in the free trade area, the EU would knowingly create a ‘hole’ in its customs border by opening up the possibility that goods produced outside the DCFTA could freely enter the EU market. This is because Chisinau would not be able to inspect Transnistrian manufacturers in order to enforce the so-called Rules of Origin, which are designed to prevent the re-export of goods produced outside the DCFTA area into the EU. Consequently, the EU cannot extend DCFTA privileges to Transnistria, because it would not be able to ensure that Moldovan goods produced in Transnistria had not in fact been produced in China or Russia, for example, and only repackaged in Transnistria.
[1] According to Transnistria’s official figures, 30% of the region’s exports reach the EU market; Moldovan and EU experts, however, have placed this figure at around 50%. Another 35% of Transnistrian exports are bought by Moldova.
[2] For a detailed discussion of Russia’s foreign policy on Moldova, see Witold Rodkiewicz, OSW Commentary, 18 April 2012, ‘Russia’s strategy towards Moldova: continuation or change?’ http://www.osw.waw.pl/sites/default/files/commentary_74.pdf
[3] Signs of Moscow’s pressure on Moldova have become evident over the last several months; examples include Russia’s insistence that a new contract on gas supply to Moldova could be signed only if Chisinau abandoned its plans to implement the EU’s Third Energy Package. See Agata Wierzbowska-Miazga, ‘Russia’s energy ultimatum to Moldova’, EASTWEEK, 19 September 2012, http://www.osw.waw.pl/en/publikacje/eastweek/2012-09-19/russia-s-energy-ultimatum-to-moldova
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