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Russia Profile
June 26, 2008
Back to the Negotiating Table
Russia Continues to Fend for Its Interests in the Face of the European Union

By Dmitry Babich

The two-day-long Russia-EU summit that opened today in Khanty-Mansiysk is seen as pivotal by many analysts who have been monitoring the relationship between the two entities. On the agenda are negotiations on the formation of a new Partnership and Cooperation Agreement which could have been launched a long time ago, were it not for various fundamental disagreements ranging anywhere from visas to meat imports. But have these differences been overcome?

Unlike the previous meetings between Russian and EU heads of state in the last few years, analysts awaited the current summit in Khanty-Mansiysk with cautious optimism. The frostiness and “war of values” in Russia-EU relations, dating back to the time of the Ukrainian “orange revolution” supported by the EU and denounced by Russia, is expected to give way to pragmatism. The agreement on the start of negotiations on the new Partnership and Cooperation Agreement (PCA) between Russia and the EU, due to replace the current one signed back in 1994, is a good sign. However, the “thaw” in relations is evanescent, as both sides, at least in their public statements, stick to their old positions. The new PCA will need to be ratified by the parliaments of all 27 EU member states, including such “friends” of Russia as Lithuania and Poland, which have been blocking the start of these negotiations for over a year.

In fact, both sides have different visions of the new PCA agreement. “Russia wants a short, businesslike document, which would spell out the economic rules of the game between Russia and the EU businesses and government bodies,” Timofey Bordachev, the head of the Center for European Research at Moscow’s Higher School of Economics, said at a recent assembly of the Council for Foreign and Defense Policy, a leading Russian think tank. “Meanwhile, the EU wants a long and binding document, which would include chapters on values, human rights and various political obligations, which Russia should undertake if it wants to be a part of Europe.”

This discrepancy was one of the reasons behind the delay in the negotiations, which could have in fact started even before 2007, when the old PCA, ratified back in 1997, was due to expire. The Polish veto on negotiations, imposed in 2007 by the radical rightist government of Yaroslaw Kaczynski due to a sanitary dispute with Russia, was just one of the stumbling blocks. The third and biggest obstacle was the unrealistic demands from the EU side.

For example, there is the visa problem. In 2001, Russia’s president suggested introducing a visa-free regime between the EU and Russia. The EU agreed in principle, but set several conditions which the Russian side had to fulfill. The terms included signing a readmission treaty with the EU, and introducing controls on Russia’s borders with other former Soviet republics, making the citizens of these republics full-fledged foreigners, requiring visas for trips to Russia. “These demands are not only unacceptable for Russia, they are technically impossible to fulfill,” said Olga Potyomkina, the head of European Integration department at the Moscow-based Institute of Europe. “Kazakhstan’s border with Russia is one of the longest borders in the world, and it was never meant to be a border, since Kazakhstan and Russia were one and the same state for centuries.”

Nurlan Kasymkulov, the head of Kazakhstan’s consular service in Russia, agrees. “Making a border between Kazakhstan and Russia similar to the border between Russia and the EU would mean cutting the human flesh, since there are many families with members living in both Kazakhstan and Russia,” Kasymkulo explained. “The United States can’t stop migration on a much shorter border between itself and Mexico, so what do you expect from two much poorer countries with a much longer border? Besides, Kazakhstan has no readmission agreements with any countries, including Tajikistan and Kyrgyzstan, which have high migratory potential.”

But the EU stuck to its demands, resulting in blockage of the real negotiations on a visa free-regime between Russia and the EU. However, Russia also sticks to its plan of having a visa-free regime or, more realistically, widening the circle of persons who are entitled to travel to the EU countries without visas.

“For us, speedy introduction of a visa-free regime with European countries remains a strategic goal,” Sergei Prikhodko, the Russian president’s foreign policy advisor said on the eve of the summit in Khanty-Mansiysk. “We shall put an accent on the fact that Russia is ready to go its part of the way.”

The situation where the “part of the way” envisioned by the EU for Russia seems to be a bit too long is not limited to visa issues. The other major area of disagreement is the activity of Russian companies in EU countries, where the new “unbundling” regulations, imposed by the European Commission, may prevent Gazprom and other “vertically integrated” Russian companies from privatizing energy objects on EU territory. Some European Commission’s members, as well as some of the EU member states, did not make a secret out of their opposition to the Russian-German Nord Stream project, which consists of building a gas pipeline between St. Petersburg and northern Germany via the Baltic Sea. Critics of the project say that it could increase the EU’s “energy dependence” on Russia, and demand that European governments find other solutions to the EU’s energy problem.

“This demand is unrealistic,” Matthias Warnig, managing director of Nord Stream AG, said at a conference organized last week in Stuttgart by the London-based Institute for Strategic dialogue. “The only two possible new sources of oil and gas for Europe are Russia and Iran. Which of the two do you choose? By the way, if the EU had decided to replace 55 billion cubic meters of annual Russian gas supplies via Nord Stream, it would have to build 38 new nuclear reactors. So, which way of energy supplies is better for Europe’s security?”

In his statement before the summit, the Kremlin’s spokesmen made it clear that Russia was not going to give up on its big companies’ investment plans in Western and Central Europe.

“We plan to raise the issue of removing unjustified obstacles in the way of Russian investments into EU economy, including its energy sector,” the Kremlin’s Sergei Prikhodko said. “We hope to overcome excessive politicization of the Russia-EU energy cooperation problems, including such promising infrastructure projects as Nord Stream.”

Whether Russia will be successful in pushing its EU partners to greater openness remains to be seen. The summit will also test the foreign policy talent of Russia’s new president Dmitry Medvedev. He remains a newcomer at the global political stage, but pragmatists warn against expecting him to be soft on Russia’s national interests.