September 12, 2013 - 13:29 AMT
Fule says Customs Union incompatible with AA/DCFTA

The Russia-led Customs Union membership is not compatible with the DCFTAs which we have negotiated with Ukraine, the Republic of Moldova, Georgia and Armenia, the European Commissioner for Enlargement and Neighbourhood Policy, Stefan Fule said.

“This is not because of ideological differences; this is not about a clash of economic blocs, or a zero-sum game. This is due to legal impossibilities: for instance, you cannot at the same time lower your customs tariffs as per the DCFTA and increase them as a result of the Customs Union membership,” he said during the European Parliament plenary meeting in Strasbourg in a statement on “the pressure exercised by Russia on countries of the Eastern Partnership.”

“It may certainly be possible for members of the Eastern Partnership to increase their cooperation with the Customs Union, perhaps as observers; and participation in a DCFTA is of course fully compatible with our partners' existing free trade agreements with other Commonwealth of Independent States (CIS) states,” Fule said.

“The development of the Eurasian Economic Union project must respect our partners' sovereign decisions. Any threats from Russia linked to the possible signing of agreements with the European Union are unacceptable,” he said.

“Let me emphasise that AA/DCFTAs are not conceived at Russia's expense. On the contrary, Russia will also benefit greatly from the integration of the Eastern Partnership countries into the wider European economy. Our vision is that these agreements should contribute in the long term to the eventual creation of a common economic space from Lisbon to Vladivostok, based on WTO rules. So we encourage our partners to deepen their ties with Russia, as we do ourselves, but in a way which is compatible with AA/DCFTA obligations. The European Union is ready to work with its neighbours to find ways to promote greater regulatory convergence between the EU and members of the Customs Union. The last thing we want to see is a protectionist wall cutting our continent in two. In today's ever-more-competitive global economy, we cannot afford to waste our efforts on a regional geopolitical rivalry,” Fule said.

Armenia completed technical talks on a ‘deep and comprehensive free-trade agreement' (DCFTA) with the EU in July and it was set to be signed at a summit with the EU in late November.

In addition to a free-trade deal, Armenia has been working towards the signing of an association agreement with the EU, a framework agreement on co-operation that is seen as a first step towards political integration with the EU.

However, during a meeting with Russian President Vladimir Putin, Armenian leader Serzh Sargsyan said Armenia is ready to join Customs Union, with further plans to be involved in formation of the Eurasian Economic Union.

Linas Linkevicius, the Foreign Minister of Lithuania, which holds the rotating EU presidency, said Armenia “has blocked its chances of signing a free trade deal with the European Union by choosing to join the Russia-led union.”

“We respect any choice of countries but they cannot enter both organizations at the same time because of different tariff requirements,” he said.

In a separate statement, Linkevicius and seven other ministers from Nordic and Baltic countries warned against Russian pressure on post-Soviet states. “Any economic threat or political pressure directed against Eastern partners because of their European aspirations and engagement with the EU is unacceptable,” they said.

When in St. Petersburg to attend the G20 summit, European Council President Herman Van Rompuy said that Armenia, Moldova, and, if possible, Ukraine will hopefully sign the Association Agreement at the Vilnius Summit in November 2013.

“This is a political agreement. The Agreement would allow Armenia to go through comprehensive change both politically and economically. Therefore, after getting the news about Armenia’s plans of joining the Custom’s Union the EU expects to hear from Armenia what her further plans are. We have not received official explanations from Armenia, yet we don’t think this is a zero sum game and the same refers to Ukraine. Some benchmarks will be necessary to meet. There are some outstanding issues but we hope to see results in Vilnius. We are still engaged with these countries and still expect to sign the Association Agreements,” he said.

On November 28-29, the EU's Lithuanian presidency will host the Eastern Partnership Summit, where association agreements with Moldova, Georgia and Armenia are expected to be initialed, and where an EU-Ukraine association agreement is expected to be signed. These agreements are accompanied by Deep and Comprehensive Free Trade Agreements (DCFTA) with the EU.