#4
Financial Times (UK)
Decmeber 12, 2001
LETTERS TO THE EDITOR: Double-speak on EU trade policy
with Russia
From Prof Carl B. Hamilton.
Sir, Pascal Lamy and Chris Patten, the EU commissioners, argue in favour of closer economic ties between Russia and the European Union ("Economic space and beyond", December 5). They say: "Central to realising (this objective) is the common economic space." Perhaps more interesting than this labelling of a still undefined and future EU-Russia economic relationship is what the two commissioners choose not to say.
First, they omit that the EU and Russia agreed in 1994 to create a free trade area between them. When this is created, Russia will have achieved the same trade relation with the EU as the UK, Sweden and the other European Free Trade Association countries used to have. The 1994 agreement on an EU-Russia free trade area is the most concrete and far-reaching economic commitment so far vis a` vis Russia. Perhaps they buried it in the opaque term "common economic space"? Why?
Second, the EU today restricts imports of steel from Russia. Steel is one of the few manufactured goods that Russia is capable of exporting to the EU. For Russia to be allowed free export of steel to the EU, the Union has laid down two conditions: Russia would have to apply to its steel sector both the EU's competition policy and the same international environmental agreements as the EU does. In effect, this means continued quantitative restriction and no free trade.
Third, the EU pursues surveillance of Russian exports of textiles and clothing to the Union. When Russia becomes internationally more competitive in these goods, the protectionist instrument is already installed for the EU to restrict imports from Russia. Fourth, Russia enjoys preferential treatment in the EU of the same sort as many developing countries do (the so-called General Scheme of Preferences). However, where Russia has in some cases managed to increase exports and has been successful, it has lost its GSP treatment in the EU.
EU citizens have the right to demand that our commissioners make up their minds and not resort to double-speak. Do we want our trade policy vis a` vis Russia to be run by narrow-minded special interest groups, clever in their lobbying in Brussels, or to be determined by our common geopolitical interest of a stable, growing and increasingly democratic Russia? Or will we have to look to the World Trade Organisation and the US to deliver economic integration of Russia in the world economy and, as a side-effect, also integration with the EU?
Carl B. Hamilton, Stockholm School of Economics, S-113 83 Stockholm, Sweden
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