SPEECH/08/300 Benita Ferrero-Waldner European Commissioner for External Relations and European Neighbourhood Policy Russia and the EU s need for each other Speech at the European Club, State Duma Moscow, 4 June 2008.
Mr Deputy Speaker,(Oleg Morozov) Let me first thank Andrey KLIMOV [Chairman of the Duma s Sub-Committee for European Cooperation] for his efforts to revive the European Club as a prominent forum for debates on Europe here in Moscow. And thanks for giving me the possibility to address this distinguished audience. Today, getting the EU-Russia relationship right is maybe the most important challenge in European foreign policy. Russia is the biggest neighbour of the European Union. In security terms, Russia is situated between the EU and some of the world s potentially most volatile regions. In economic terms, our immediate neighbour is a country with a booming economy that soon is expected to replace Germany as Europe s biggest market for consumer goods. Ten years ago, Russia faced very significant political and economic challenges. Now international discussions about Russia focus more on what the country will do with its success. During the past decade, Russia has gone from being an indebted net receiver of foreign assistance to a donor country with the world s biggest gold and currency reserves per capita. Over the same ten years, the EU has undergone substantial changes too: the biggest enlargement in our history, the creation of a single European currency, the growing range of areas in which we integrate our policies, and the ever-greater role that the EU plays on the world stage, make today's Union a very different, stronger actor. We are a more valuable and a more effective partner for our friends. The new Lisbon Treaty, which I hope will be ratified soon, will take us yet another step forward. While we both have been changing so fast, the EU is sometimes accused of failing to keep pace with the successful, assertive Russia we see today. There may be some truth in that. The forthcoming launch of negotiations for a New Agreement between the EU and Russia is an opportunity to catch up and to engage in a deep reflection about the future direction of our strategic partnership. No one can doubt the potential of this relationship. Already our trading and economic partnership is booming. Russia is now the 3 rd biggest trading partner of the European Union. And, over half of Russian exports go to the European Union. The Russian market expanding on the back of the solid growth recorded over the past years, means opportunity for businesses from the EU and elsewhere. Foreign Direct Investment from the EU is on the increase. I am convinced we have not yet fully exploited the potential of our economic and trading ties, and there is scope to improve even on this already strong relationship. Energy is the centrepiece of our economic partnership. Russia is traditionally the EU's major supplier, and energy sales to the EU have provided crucial export revenue which has been an important contributing factor in Russian economic growth. 2
Here again, I believe there is scope for us to expand this partnership, so as to increase opportunities for Russia and the EU to increase their presence in each other s markets. We know there are major investment needs all the way along the energy value chain in the Russian energy sector, and EU investors are keen to invest, just as Russia s undertakings are keen to invest in the EU. The negotiations on the New Agreement will include provisions on energy. The good work we have done in the EU-Russia energy dialogue has provided us with a good understanding of each other's positions, and we now need to engage on the principles we all agreed upon during Russia's chairmanship of the G8. The EU wants to develop an energy relationship with Russia that is based on transparency, reciprocity, and non-discrimination. While energy is certainly a key element in our economic and trading partnership, we also appreciate Russia's need to diversify the economic basis of its prosperity. The EU is the obvious partner for Russia in this process. Let us work on an EU-Russia modernisation partnership. In this context I would like to stress the country s scientific and research capacity. At the end of May, we held our first ever meeting of the Research and Development Permanent Partnership Council. Russia has made a formal request for associate status to the EU s Framework Programme in Research and Development, and this would be a significant step forward in our already active co-operation on science and technology. This will need to be addressed in the forthcoming negotiations. Second, Russia lies adjacent to the world s biggest single market of close to 500 million people, and an economy based largely on innovation. To connect more closely with this European economic reality would - for Russia - be an important step on the path towards economic diversification. Let me stress one point: A strong Russia is positive for the European Union. If we are to tackle problems such as uncontrolled migration, climate change, drugs trafficking and cross-border crime, we need to do so with a prosperous and stable Russia. We are often close partners in tackling international challenges: whether as fellow-members of the Middle East Quartet, or working together on peacekeeping in Chad and the Central African Republic. The EU also needs a Russia that pursues a positive agenda with its other neighbours. This is crucial for stability in our common neighbourhood and in Central Asia. The EU, as you know, is concerned that recent Russian moves in Georgia in particular, might undermine stability on Russia s southern border, particularly relevant with the Sochi Olympics on the horizon. Greater instability in the region is clearly not in our mutual interest. We in the EU will continue to argue for an approach that fully respects Georgia s sovereignty and territorial integrity and at the same time, we will pursue confidence-building measures and promote real dialogue between the two sides in Georgia. We want to do this together with Russia. Recent developments in Moldova show us that this can be done, when there is sufficient will and momentum on all sides. After this outline of the potential for our future cooperation, I would now like to say some words about how we - at political level - can create the best possible conditions for our relationship. The New Agreement between us should modernise our institutional framework and build a new partnership for the next generation of Europeans. 3
The negotiation of a New EU-Russia Agreement will not in itself solve all the issues we face. However, a New Agreement that combines an enabling, legally-binding institutional framework with an ambitious agenda for equal partners would be an important step forwards, clarifying our objectives, and building trust. We need a comprehensive and substantive agreement, but not an encyclopaedia. Anything too short would also be of little use. The slim-line document some are talking of would make the notion legally binding rather empty. The New Agreement will have to reflect the substantial changes that both Russia and the EU have undergone since the current Partnership and Co-operation Agreement was negotiated in the early 1990s. Hallmarks of this cooperation will be: results-orientated political co-operation, deep economic integration, a level playing field for our energy relations based on the principles of the Energy Charter Treaty, ever closer relations in the field of freedom, security, and justice, - on which the EU itself was much less active 10 years ago - and the opening of our educational and scientific systems to each other. In order to facilitate investment and trade, the New Agreement should help provide transparent rules. We will need to be ambitious on improved market access and other key principles of WTO in particular non-discrimination, regulatory transparency and good governance. These principles will need to be further developed in a deep and comprehensive free trade agreement once Russia has completed the WTO accession process. I am aware of voices inside Russia that sometimes counsel against accession. All through Russia s journey towards the WTO, the EU has been a strong supporter, and we strongly believe it is in Russia s long-term interest to pursue its integration into the world economy. We will be talking about how to strengthen our co-operation on Justice, Liberty, and Security, in discussions that will encompass our work on fighting crime, terrorism, and drug trafficking. The New Agreement will also cover the work we are doing to make it easier for Russian and EU citizens to travel, in particular through our discussions on visas, where we have an agreed long-term goal of a visa-free regime. The Four Common Spaces and Road Maps will remain our common policy agenda in the short- and medium term, but they will now be embedded in a new institutional and legal framework. The new agreement should, of course, have a strong mention of the democratic values and human rights. Without lecturing or thinking we know better, the EU will always attach great importance to the values to which we have both made binding legal commitments at international level, for example as members of the Council of Europe. This is not about imposing values, but about stressing the universal principles of open societies and economies to which we are both committed, and the respect of which is ultimately decisive for the successful pursuit of common interests at home and on the world stage. In this context, I would like to highlight the Parliamentary dimension of EU-Russia relations in particular the Inter-Parliamentary Cooperation Committee with the European Parliament. This Parliamentary cooperation should be reflected also in the new EU-Russia framework agreement. 4
In conclusion, allow me to underline that the relationship between the European Union and Europe s biggest country must be strategic in nature. It is important sometimes to look at our relationship - not in the light of the newswires and occasional irritants - but in the light of our history and our strong common interests. The political transition in Russia, new developments in the European Union itself, and the launch of negotiations on the New Agreement makes this a perfect moment for this reflection, and I am sure that the European Club will play its part in this process. Thank you! 5