Zagorski: Tough task ahead for EU-Russia talks

Energy, trade, investment and security will be at the heart of EU-Russia partnership negotiations, Andrei V. Zagorski told EurActiv Slovakia in an interview. The Russian expert predicts that negotiations will be difficult as the EU-Russia relationship is "not going through the best time". But the Russian academic is hopeful that agreement can be struck, citing substantial "mutual interests".
How has the EU's relationship with Russia changed since the invasion of Georgia, since the gas crisis and since the deepening of the financial and economic crises?

The relationship is seen as crucial for both Russia and the EU. At the same time, the relationship is not going through the best of times, for the reasons you have mentioned, but mainly due to the Georgia crisis. It is a big challenge for the EU and Russia, and not an easy task. In many instances, in fact, EU-Russia relations have reached a low ebb, particularly since 2007, and have to be recovered.
Will it be possible to conclude a new EU-Russia Partnership and Cooperation Treaty in a reasonable timeframe? What opportunities and what threats do you see in the negotiation process?

There are several issues on which we have already found common ground: First of all, we both want a new treaty to replace the existing Partnership and Cooperation Agreement; we want a new legal instrument; we want to keep the previous agreement active as long as it takes us to negotiate the next one; and we want to be comprehensive – we want to cover all relevant areas of cooperation.

Secondly, both sides have laid out their vision for the new treaty. So we see similarities, and we have been talking to each other for a long time about what we want to achieve. And we also see differences in our approach.

The first and probably the most important difference in approach is what sort of document we want to have at the end.

Moscow would prefer to speedily negotiate a pretty short agreement, which would lay out basic principles of cooperation, while leaving the job of specifying the details of cooperation to sector agreements that would be negotiated either parallel to, or after, the frame agreement is concluded.

The European Union wants a reasonably detailed document with provisions on many issues that are relevant to EU-Russia relationship, including energy, investments and other issues.

So we need to find some common ground on how detailed we want the final treaty to be, and what details should be left out for sector agreements. We both understand that sector agreements are needed, but we have to define the level of detail we should have in the basic treaty.

Certainly, we face differences in specific areas and we are well aware of this. We need to negotiate a set of rules in a framework for energy cooperation. The issue remains as to whether we want a detailed agreement within the basic treaty, or whether we will have a separate agreement dealing with the issue of energy. Both sides want regulation that would support mutual investment. The EU wants reciprocal moves on regulation, so we will have a difficult negotiation on rules. But both Western and Russian companies face difficulties in investing in Russia and the EU.

We definitely have a different take on the rule of law and democracy, which is not a major concern in Russia, where you clearly have a different approach to dealing with it. Moscow definitely does not want to have any conditions regarding these issues implied in the new treaty. We do not want any conditions. We want to cooperate on political issues, including human rights and the rule of law. In a draft, the EU requested further development of existing mechanisms for discussing human rights. We will see how far we will go with this, the most difficult issue for the negotiations.

We are at the very beginning of discussing all these issues. I expect we will move forward as long as we basically understand what sort of balance of interests we want to have at the end, which also includes the vital question of which areas should be covered by basic agreement, and which ones require separate treaties. It is clearly the beginning of a process in which our visions differ, but we must remember that we share a common vision on how to move forward.
The energy issue is probably the most visible issue for EU-Russia relations. During discussions in Bratislava (Slovakia), you said that 'the EU is moving east, while Gazprom is moving west'. Is this a trend for the future? What are your expectations regarding Gazprom's move west?

Energy is one but not the only issue. It is very visible, because everybody talks about it – energy, energy prices, energy security etc. Energy and several other issues on the agenda are closely linked to other areas of cooperation. In this perspective, the biggest issue on the agenda is which set of rules is EU-Russia energy cooperation going to be governed by in the future.

This question must take several dynamics into account - principles which we had formulated in 2007 at G8 summit in St. Petersburg, and are in line with the principles of the European Energy Charter. At the same time, Russia has not been part of, nor have they ratified, the European Energy Charter, nor the Transit Protocol. I expect that Moscow will not ratify these documents, which means energy cooperation between EU and Russia is not about to be governed by the rules of the Charter. As a result, we have to specify other rules by which our energy relationship with Russia will be governed.

I would like to emphasize that it is not the Energy Charter per se that represents the problem for Russia, just several specific elements. In my view, we might be able to negotiate a text that will help us overcome those 5-6 differences. We might be able to produce a document that would govern this area of cooperation, which is seen as controversial in EU-Russia relations.

The EU is also very concerned with energy supply issues, particularly linked to other transit countries. The EU and Russia agreed to set up the early warning system due to our experience of supply shortages, and not just in reaction to the last gas war between Moscow and Kiev. In the autumn of 2008, the early warning system was activated, but it did not prevent the crisis. It did not prevent people from freezing this winter.

We need to establish a mechanism to avoid such incidents in the future. This is an important area for cooperation. In this regard, we have seen varying degrees of success – the EU talks with Russia on this, the EU talks with Ukraine as well, Russia wanted to talk with Ukraine on this, but it did not happen and we still do not have a common framework.

Gazprom is interested in investing in the EU. Other Russian companies are also interested. They try to get equal access to business projects, including energy ones. There is different and often prohibitive legislation that makes reciprocal investing difficult. In matters of reciprocity, energy is a key sector.

We will have a separate and very important discussion on issue of energy efficiency, which is a big issue in Russia and part of the EU's agenda. As we see, it is not just about regulation making, but also about a positive agenda of cooperation.
Russia is proposing a new European security pact. What is this based upon? What kind of role might the EU play in it? And in general, would this pact be viable?

I have no response to this, because the Russian government did not clarify what Moscow wants. There are no papers, no drafts, no officially presented ideas for the new treaty. So this concept includes nothing new. I still lack a clear understanding of what Russia wants at the end. As long as I do not know that, I cannot predict how successful it might be. So, we must wait and see.
But the reality is that we have a concrete security architecture in Europe, which includes the EU, NATO and partly the Organisation for Security Co-operation in Europe (OSCE). Would it be possible to alter this in the future?

This is probably the heart of the issue, because if Moscow launched this initiative it indicates that Russia is unhappy regarding how it finds itself in the European institutional setting, not just concerning security, but also in the wider context. Europe is gradually coming together under the umbrella of the EU and NATO, leaving very few spaces uncovered by Euro-Atlantic institutions. In this process Moscow is being left aside. This feeling of being left on the sidelines can be viewed as a problem.

Theoretically, we can discuss several options regarding how Moscow could come back into the European architecture:

Option one - and it is on the minds of many people in the Kremlin, but I am not sure if this would be part of President Medvedev's initiative itself - is to view NATO and EU expansion into territories that can be labelled as areas of Russian privileged interest or privileged relations, including Ukraine, Georgia etc., as represents a threat and Russia wants these territories to be the part of the Russian framework of cooperation.

In practice, it means we want Ukraine to be neutral and refrain from joining any alliance not created by Moscow, we want Georgia not to become a member of the EU or NATO, etc. Under this option, the new security pact could define the instruments Moscow could use to preserve its so-called privileged area.

In this case, we do not talk about revising the existing architecture of European institutions, but talk about leaving the space for parallel architecture in the former Soviet Union's space. This would allow Moscow to have the feeling of 'Ordnungsmacht' (i.e. an order-shaping power) in this area. The open question is to what extent is this going to be acceptable for the US, the EU and NATO.

The second way, if we can think about the changing of architecture, is whether or not Russia may change its policy, and may integrate into the current system based on the CE, EU, NATO and partly on the OSCE. I do not see so much political willingness in Moscow to go down the road of integration. The more pertinent question is rather how Moscow can remain the part of the European system without integrating. But I would not rule out any future discussion of this issue.

Russia will probably not become a member of the EU or NATO, but rather it would mean strengthening and developing qualitatively different and more productive direct cooperation between Russia and NATO, as well as between Russia and the EU. This would complement missing elements of the existing European security system.

Many people in Moscow think about a triangle consisting of Russia, the US and the EU as principal actors. To extend this formula, we would need to start accepting European decisions taken by Moscow, whatever form they would take.

We have different sorts of thinking and reactions to Medvedev's initiative regarding security in Europe, because there is no consensus yet within the EU or NATO on this issue. Current architecture based on the EU, NATO and OSCE is basically sound. It is not perfect, but while there might be a need for continuous improvement, there is no need to drastically change it.

The basic issue is that Moscow is unhappy with way it is integrated into the system, so let's talk about that. I think this is a bottom-up discussion and I would not expect the system based on NATO and the EU, and partly on the OSCE, to change. Although, I am not yet sure to what extent we would be able to successfully agree on how Moscow could find an appropriate place for itself within the current system.

These are the options as I see them, but I do not see any clear one that would be seen as being in everyone's interest.
Let's summarise. Where are EU-Russia relations today? What can we expect in the near future? What are the threats and opportunities of this common relationship?

Well, I think we have a very solid basis for this relationship, because economically it is very sound: the EU is Russia's main trade partner. Russia is the third biggest trade partner for the EU. So, we have a solid foundation. Although we need to diversify and change it, because at the moment the trade is very simple and we have a complex state of interdependence.

We do have a common political understanding that this relationship is crucial for both. On both sides, we recognise that at the moment it is not working properly at the political level, because both the EU and Russia have been evolving as entities, with different interests and a distinct self-perception, particularly in the case of Russia, and we have reached the status where several issues on the agenda are controversial – investments, democracy, rule of law, energy and many others. So we have to find some common ground on these issues that we have to negotiate. It is not going to be an easy negotiation.

We will have to find a comprehensive balance of interests, and we will have to establish a new agreement on cooperation and partnership. I am not sure if the economic crisis is exactly the best time to do this, because interests may change once this crisis is over, and it is impossible to predict what those interests are going to be. So I would not expect that negotiations will be very fast, but I am sure we will find an agreement at the end.

On the other hand, there are pre-existing agreements, so there is no danger of creating a legal vacuum. We have the Partnership and Cooperation Agreement signed in 1994, which entered into force in 1997, and it is sufficient to sustain the current trade between the two. It is a document that mainly regulates the trade conditions between Russia and the EU and establishes the mechanism of political dialogue to sort out any issues. As long as Russia is not a member of WTO, the conditions provided by the current Partnership and Cooperation Agreement are absolutely sufficient for the level of cooperation that exists at the moment.
Dr. Andrei V. Zagorski is an expert on European security, relations between Russia and NATO and relations between Russia and European organisations (including the Organisation for Security Co-operation in Europe and the EU institutions). He is a professor at MGIMO (the Moscow State Institute for International Relations).
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