Russia’s Middle Term Strategy towards the EU (2000-2010)

THE RUSSIAN FEDERATION MIDDLE TERM STRATEGY TOWARDS THE EUROPEAN UNION (2000 - 2010)

The Strategy determines objectives of development of Russia’s relations with the European Union for the next decade and means of their achievement. It is a consistent evolution of the general foreign policy concept of Russia in the European area and it stems from the objective need to establish a multipolar world, common histories of nations and responsibility of European States for the future of the continent, and complementarity of their economies. It is also directly coordinated with the concept of economic security of Russia.

The Strategy is primarily aimed at insuring national interests and enhancing the role and image of Russia in Europe and in the world through establishing the reliable pan-European system of collective security, and at mobilizing the economic potential and managerial experience of the European Union to promote the development of a socially oriented market economy of Russia based on the fair competition principles and further construction of a democratic rule-of law State. In the transition period of reform, however, the protection of national production in certain sectors of economy is justified, subject to international law and experience.

The Strategy is aimed at development and strengthening of strategic partnership between Russia and the EU in the European and world affairs and prevention and settlement, through common efforts, of local conflicts in Europe with an emphasis on supremacy of international law and non-use of force. It provides for the construction of a united Europe without dividing lines and the interrelated and balanced strengthening of the positions of Russia and the EU within an international community of the 21st century.

With Europe currently going through the transition period in its development (the need to stabilize economy and maintain the socially oriented reforms in Russia; expansion, institutional reform, creation of "defense identity", consolidation of the common foreign and security policy and of the EU economic and monetary union), the Strategy basically focuses on achieving the short- and medium-term goals of this stage and laying the foundation for advanced partnership relations between the Russian Federation and the European Union in the future. The 1994 Partnership and Cooperation Agreement (PCA) remains its major legal and institutional basis. The activities related to the development of cooperation with the EU, however, should be closely coordinated with the process of Russia’s accession to the World Trade Organization, which requires certain adjustment of the PCA after the end of the above-mentioned process.

The Strategy, finally, reflects the main orientation and objectives of the European Union Collective Strategy with respect to Russia, adopted by the European Council in Cologne last June. It is possible and desirable to join the efforts of the parties to achieve the objectives of these documents through regular meetings of their leaders on the basis of the broad political dialogue, political consultations, joint programs on the PCA implementation, adopted by the Cooperation Council, within the framework of the activities of the Agreement working bodies and through regular diplomatic channels.

The following areas in developing and strengthening the relations of partnership and cooperation between Russian and the EU are priority tasks for the decade to come.

1.1. During the period under review, partnership between Russia and the European Union will be based on the treaty relations, i.e. without an officially stated objective of Russia’s accession to or "association" with the EU. As a world power situated on two continents, Russia should retain its freedom to determine and implement its domestic and foreign policies, its status and advantages of an Euro-Asian state and the largest country of the CIS, independence of its position and activities at international organizations. From this point of view, partnership with the EU can manifest itself in joint efforts to establish an effective system of collective security in Europe on the basis of equality without dividing lines, including through the development and implementation of the Charter on European Security, in progress towards the creation of the Russia - European Union free trade zone, as well as in a high level of mutual confidence and cooperation in politics and economy.

1.2. The development of strategic partnership between Russia and the European Union will be reflected in active interaction between the parties to achieve major collective objectives of mutual interest and to solve European and world problems and in enhancement of the positive elements of the European independence and identity in economy and politics.

1.3. Such nature of the partnership means that Russia does not only rely on the European Union’s potential but also supports efforts made by the EU in the areas that are important for it where interests of the parties objectively concur.

1.4. The Russia - EU partnership should be based on the maximum use of benefits offered by the PCA and the fullest possible realization of its provisions and follow-up goals agreed upon by the parties, as well as take into account the widening of supranational powers of the EU bodies under the Amsterdam Treaty, which came into force on May 1 this year.

1.5. Such partnership could include the following steps to be made in the forthcoming decade:

- to ensure pan-European security by the Europeans themselves without both isolation of the United States and NATO and their dominance on the continent;

- to work out Russia’s position on the "defense identity" of the European Union with the Western European Union to be included in it, as well as to develop political and military contacts with the WEU as an integral part of the EU, and to promote practical cooperation in the area of security (peacemaking, crisis settlement, various aspects of arms limitation and reduction, etc.) which could counterbalance, inter alia, the NATO-centrism in Europe;

- to develop an advanced pan-European economic and legal infrastructure as a reliable basis for trade, investments, sectoral, subregional and transboundary cooperation (in particular, in the "Northern Dimension" format and in the European Mediterranean region); to protect environment and establish dignified standards of living in Europe; to make joint efforts in the field of science, education and health; to jointly combat terrorism, illegal drug trafficking and transnational organized crime;

- to consult and, when appropriate, coordinate positions of the parties in international organizations.

1.6. Efforts will continue to be made for further opening of the EU’s market to Russian exports, elimination of the remaining discrimination in trade, encouragement of the European investments, particularly in the real sector of the Russian economy, protection of Russia’s legitimate interests while further expanding the European Union and introducing the single currency (euro), opposing possible attempts to hamper the economic integration in the CIS, in particular, through maintaining "special relations" with individual countries of the Commonwealth to the detriment of Russia’s interests.

1.7. To use the positive experience of integration within the EU with a view to consolidating and developing integration processes in the CIS area. To strive for the coordination of activities with the member countries of the Customs Union and other CIS member states in the field of trade, political, economic, financial, humanitarian and other relations with the European Union.

1.8. On the basis of reciprocity and the existing potential, Russia could contribute to the solution of a number of problems facing the European Union, and to the strengthening of Europe’s common positions in the world: facilitation of the economic growth and employment in Europe through trade and investment channels, long-term and stable supplying of the EU on a contractual basis (in particular, through product sharing agreements and concessions) with energy resources and raw materials; profound integration of scientific potentials of the parties and commercialization on the EU market of achievements by Russian fundamental and defense researchers, networking of infrastructure (transport, pipelines and electricity transmission lines) and information systems ("European information society"); facilitation of outer space research and exploration, including the establishment of global navigation, communications and environmental monitoring systems; participation in the modernization and safeguarding of European nuclear energy installations; facilitation of the strengthening of the euro as an international currency through officially including it into the foreign currency reserves of the Bank of Russia; military and technical cooperation with due account for the prospects of establishing a European "defense identity"; joint prevention and eradication of local conflicts and combating organized crime in Europe.

On the other hand, the development of partnership with the EU should contribute to consolidating Russia’s role as a leading power in shaping up a new system of interstate political and economic relations in the CIS area.

1.9. Interested regions of Russia should have an opportunity to actively participate in the development of partnership with the European Union in the economic and humanitarian fields as well as in the implementation of transboundary cooperation programs (see also Chapter 8).

1.10. Since the implementation of the Strategy affects the relations of Russia with the United Nations, OSCE, the Council of Europe, NATO, OECD, the World Bank and EBRD, its operational realization will be linked to the policies of the country with regard to these organizations.

2. Enlarging the format and improving the efficiency of the political dialogue.

2.1. It is necessary to establish working contacts and interaction with the EU bodies being pursuant to the Amsterdam Agreement in the area of general foreign and security EU policy, including "the defense identity" being acquired by the European Union. In order to develop a political dialogue it is necessary to institutionalize annual meetings within the format of the Chairman of the Government of the Russian Federation - Chairman of the CEC and Chairmen of the chambers of the Federal Assembly of the Russian Federation - Chairman of the European Parliament.

2.2. To work towards moving from reciprocal exchange of information about positions of the parties to holding of advance consultations on the most acute issues in order to elaborate concerted decisions. To seek to form for summits and Cooperation Council meetings joint initiative packages of mutual interest. To ensure close business cooperation between the Russian constituent parts of the cooperation Council, Cooperation Committee and the Parliamentary Cooperation Committee.

2.3. To intensify cooperative work in order to preserve and strengthen the OSCE as a key basis of the European security. In doing so, to elaborate a clear procedure for all the OSCE bodies and institutions and unconditional preservation of consensus as a basis of decision-making. To continue the work related to the preparation and subsequent implementation of the Charter on European Security. To expand practical interaction with the EU in the prevention and peaceful settlement of conflicts in the OSCE area.

2.4. To continue persistent search for possible forms of Russia’s involvement in the ongoing dialogue between the EU and other world powers and economic groups. In this connection, to support Finland’s proposal to hold a tripartite Russia-EU-US summit with a detailed agenda that takes into consideration Russia’s concerns.

3. Development of Mutual Trade and Investments.

3.1. To continue the work on creating favourable conditions for access by Russian-made goods and services to the EU market and to eliminate elements of their discrimination, fully recognizing the market status of Russia’s economy.

3.2. To study the issue of adopting a set of measures to develop trade and economic cooperation with the European Union providing for possible trade, financial, economic, tax and other exemptions to be offset by the inflow of investments in Russia’s economy.

3.3. To develop, as soon as possible, jointly with the EU a package of mutual measures to promote foreign investments in the real sector of Russia’s economy, which combine, on the Russian side, the adoption of a favourable investment legislation and the ensuring of security of foreign investments and, on the EU and its member states side, respective financial instruments and programs including the extension to Russia of the European Investment Bank operations. To expand the use of the TACIS program resources for the preparation of feasibility studies on foreign investments. To create favourabe conditions for Russian investments in the EU.

3.4. Taking into account the interrelation of trade and competition, to induce the EU to recognize progressive transformations in the Russian antitrust policy and develop active cooperation in this area.

3.5. To encourage the normalization of export to the EU of Russian nuclear cycle products with the concomitant preservation of the position of nuclear station equipment, fuel and services on the CEE and Baltic markets, the provision of services related to commercial space launches, the positive review and phase-out of applicable antidumping procedures, the preservation of existing trade preferences and granting of additional ones, and the future abolishment of quotas on export to the EU of Russian steel products.

3.6. Cooperation in the nuclear field shall include:

- attraction of European capital to the building in Russia of new generation nuclear stations (with credits to be repaid through energy supplies);

- Russia’s participation in the development of the European energy reactor and joint efforts to carry out an international pilot project to build a thermonuclear reactor;

- development of new nuclear energy technologies, including environmentally sound fuel cycle;

- ensuring of safe transportation, storage and utilization of nuclear wastes in the North-Western regions of Russia;

- efforts to join in the planned upgrading of the EU nuclear power engineering.

3.7. To work towards implementation, with the participation of EU countries’ firms, of major investment projects designed to develop promising oil and gas fields, establish energy transportation structures, which will make a substantial contribution to the process of pan-European economic and energy integration. In this context higher energy efficiency in Russia and the European Union will be viewed as a major tool to diminish man-made pressure on natural environment and to reduce green house gases emissions in accordance with the decisions of the international Kyoto and Buenos Aires conferences. To seek formulation of a joint long-term energy policy in order to create a common European, and in the long run, Eurasian energy space.

3.8. To seek a realistic and positive approach of the European Union to the terms of Russia’s membership in the World Trade Organization. Before the "millennium round" of the multilateral trade negotiations within the framework of the WTO, to press for Russia’s full participation in the round by using the European Union’s position on the issue.

3.9. Together with the experts of the European Union to consider the availability of conditions for opening negotiations on the establishment of a free trade area under the provisions of the Partnership and Cooperation Agreement. To be guided by the advisability of its gradual establishment after Russia’s accession to the WTO on the basis of Article XXIV of GATT-94 and of the agreed interpretation of this article. Through the establishment of the area, to seek Russia’s access to the entire European economic space; to insist that the respective obligations be set off by the advantages gained, and not to allow that the arrangements are in conflict with the CIS legal mechanisms of economic integration, including those of the member states of the Customs Union.

3.10. Taking into account the progress made in developing a model of resources-saving production and the expected inflows of investments to Russia’s production sector, to ensure growth in the mutual trade by increasing the share of manufactured goods, machines, equipment, electric power and services.

3.11. To finalize as soon as possible and to adopt jointly with the European Union a plan of action in the area of copyrights, and to develop cooperation in this field, including exchanges of scientific information and staff.

4. Cooperation in the financial field.

4.1. To press for an increased scope of the EU’s programs of technical and other assistance to Russia. To channel a major portion of the TACIS’s resources to restructuring the Russian banking system and to attracting foreign investments to Russia.

4.2. To achieve arrangements on partial write-offs or restructuring of Russia’s debts to the EU member states. To conduct negotiations with the CEC and the European Central Bank on the procedure of converting the interest payments and principal payments into euros and to reach an agreement on interest rates for the loans granted to Russian debtors in national European currencies. To agree upon the terms and time limits for re-denominating a part of Russia’s external debt currently denominated in national currencies of the EU member states.

4.3. To create conditions for broader use of the euro in the external economic activities of Russian firms and banks, further increase in the amount and range of the operations involving the euro in the Russian domestic financial market, primarily by improving the existing legislative base. As the euro market develops in Russia to provide for a greater role of the single European currency in the formulation and implementation of the exchange rate policy of the Central Bank of Russia. To expand and consolidate practical interaction with the European Central Bank, the European System of Central Banks and other bodies of the EU in order to coordinate actions in view of future reform of the international financial system.

4.4. In the context of increased inflows of European investments and assistance in restructuring Russia’s banking system, to consider the possibilities of increasing the portion of the foreign capital, in particular, the European capital, in the total assets of the Russian banking system with a view of its improving and re-capitalization.

4.5. To search for cooperation with the EU in other fields, including those stated in the Agreement on Partnership and Cooperation.

5. Securing the Russian interests in an expanded European Union.

5.1. Taking into account the ambivalent impact of the European Union’s expansion on the terms of its cooperation with Russia and on the Russian interests, to strive for achieving the best advantages of such expansion (lower customs protectionism, civilized transit standards, etc.) while preventing, eliminating or setting off possible negative consequences.

5.2. Before the next expansion of the European Union to conduct consultations with it, its individual members and candidates aimed at securing Russia’s interests as the rules of the EU agricultural, technological and antidumping policies, its visa and border regimes, or preferences to the developing countries which are competing with the Russian exports are extended to the countries of Central and Eastern Europe and the Baltic states, as well as to safeguard, in the interests of stability, security and cooperation in Europe, the rights of the Russian-speaking population in the Baltic states.

To consider, as a reserve option, a refusal to extend the PCA to cover those candidate-countries that, in spite of the existing agreements, do not ensure fulfillment of the generally recognized norms. To secure that the EU fully follow the high standards established by it as to the admittance of new members. In contacts with the EU to pay special attention to securing protection, including under the international law, of the interests of the Kaliningrad region as an entity of the Russian Federation and of the territorial integrity of Russia (see also Chapter 8, item 4).

6. Development of the pan-European cooperation infrastructure.

6.1. To develop the state transport policy in the Western direction taking into consideration the prospects of consistent growth of the volume of trade, passenger and cargo transportation between Russia and the European Union countries. To combine a search for a diplomatic solution of the problems of normalization of transit through the Baltic and the CEE countries with creation of our own alternative transportation routes and cargo handling points.

6.2. To start, in case of achieving a pertinent agreement with the EU, connecting the gas and oil pipelines and the systems of distribution of electrical energy in the European part of Russia to the corresponding systems of the European Union and the CEE countries. To insist on active participation of the EU, including in settling financial issues, in implementation of the projects of the pan-European importance, in particular, in construction of the new gas pipeline Yamal - Western Europe and its laterals to Scandinavia, and the European transport corridors.

6.3. To strive for participation in tenders for contracts and subcontracts on development and modernization of infrastructure projects of pan-European importance within the European Union. To modernize and enlarge the maritime-trade fleet and road vehicles pool ensuring transportation in the Western direction as financial and technical opportunities arise. To continue joint efforts with the EU countries to create the railway rolling stock, including wagons with expandable wheel pairs, allowing automatic transfer of wagons, during their journey, from European to the Russian railway tracks.

6.4. To encourage share participation of the Russian businesses in the European Union infrastructure projects, creation of Russian or mixed transportation and shipping organizations, warehouses, storage tanks, port facilities, cargo handling terminals. To make the step-by-step access of European Union ships to the internal waters of Russia conditional on the adherence to the principle of reciprocity and on the EU assistance in modernization of those routes. To link this process to the progress in Russia’s joining the WTO.

6.5. To promote cooperation in working out common transport policy, introduction of efficient transport process technologies on the basis of approximation and harmonization of its legal framework, simplification of the border crossing procedures, subject to assuring the economic security of Russia.

6.6. To continue developing the pan-European transport corridors, first of all corridor No. 1 (in particular, its laterals to Riga- Kaliningrad- Gdansk), as well as No 2 and 9. To improve quality of transportation services and create more attractive conditions for users of the railway services in the above mentioned corridors. To promote active cooperation in development of Eurasian transport connections through the territory of the Russian Federation, and in the first place, interaction between the European transport corridors and the Trans-Siberian trunk railway. To try to ensure that these and other infrastructure projects are funded by the European Investment Bank.

6.7. To promote the idea of joint designing and developing new air transport means, to conduct negotiations in order to conclude an agreement on certification of the Russian civil aircraft in the EU and to widen access of the Russian aviation companies to the airports of the European Union.

6.8. To stimulate participation of the Russian businesses in infrastructure projects in the territory of the European Union, creation of Russian and mixed transportation and shipping organizations and cargo handling facilities.

6.9. In the process of implementation by the CIS countries of their projects of alternative gas and oil pipelines circumventing the territory of Russia to try to identify commercially advantageous forms of participation, sales of construction materials, technologies, work and services. To encourage Russian businesses to take part in such projects. To ensure that Russian interests are taken into account in "Inogate" and "TRACECA" projects, being executed by the CIS and EU countries.

7. Cooperation in the field of science and technologies, protection of the intellectual property rights.

7.1. To strive for the earliest conclusion of the new Agreement on cooperation in the field of science and technologies. Fully use opportunities of participation of Russian scientists and scientific centers in the EU Framework programs on science and technology development and demonstration activities, as well as in its educational programs.

7.2. In accordance with the Declaration signed by the EU, to take an active part in creating the "European information society" and to assure that Russia is considered to be an integral part of it.

7.3. To take measures with a view to implementing large-scale joint projects in the area of the outer space exploration, in particular, by means of participation in the Global navigation system that the EU is now establishing, the new systems of satellite communication and remote sensing of the environment of Europe.

7.4. To examine, in cooperation with the EU, the opportunities for drafting and launching a program on convergence and partial integration of the scientific and technological potentials of Russia and the EU, enhancement of the international competitiveness of the European science and industry through the introduction of Russian advanced patents and developments, including conversion R and D, in exchange for the EU’s support of Russian science.

7.5. To take measures to use the EU technical assistance programs for the development of the innovative activities and a deeper involvement of the EU in the programs of the International Science and Technology Centre.

8. Transboundary co-operation.

8.1. To take advantage of the common EU-Russian border and its prospective extension with a view to raising the level of the transboundary interregional co-operation and regional development of both parties up to the standards established within the so-called Euroregions. To seek to extend to such activities the supranational and national incentive schemes operational within the EU, including the visa and border regimes. To encourage contacts among Russian and EU regions, in particular, by using the resources of the EU Committee of the Regions, with a view to fostering the humanitarian and economic ties and sharing of experience of local self-government and business administration.

8.2. To substantialize by the joint efforts the initiative of the Northern Dimension in the European cooperation. To seek the EU’s financial support to it and attract investments from the outside Europe. To ensure that the implementation of the initiative is directed not only at the promotion of exploration and exportation of raw materials, but also at the integrated development of the Northern and North-Western Russia.

8.3. Given a special geographical and economic situation of the Kaliningrad region, to create the necessary external conditions for its functioning and development as an integral part of the Russian Federation and an active participant in the transboundary and interregional co-operation. To determine the prospects of the optimal economic, energy and transportation specialization of the region in order to ensure its efficient functioning in the new environment. To establish the sound transportation links with the Russian mainland. To pursue a line to the conclusion, if appropriate, of a special agreement with the EU in safeguarding the interests of the Kaliningrad region as an entity of the Russian Federation in the process of the EU expansion as well as to its transformation into a Russia’s pilot region within the framework of the Euro-Russian cooperation in the 21st century.

8.4. Pursuing the Mediterranean direction of interregional co-operation (the Barcelona Process), to follow the course towards the Russia’s selective involvement in its activities and securing Russian interests in the establishment of the Euro-Mediterranean free trade area.

9.1. To endeavour to support and develop the PCA by means of the specific agreements with the EU in various areas of cooperation.

9.2. To pursue a line to making arrangements with the European Union for the joint elaboration and conclusion of a new framework agreement on the strategic partnership and cooperation in the 21st century that will succeed the PCA. To advance to it progressively depending on the PCA implementation on the basis of practical achievements as well as general aspects of the strategies on development of partnership and cooperation between Russia and the European Union.

9.3. While preserving the independence of the Russian legislation and legal system, to pursue a line to its approximation and harmonization with the EU legislation in the areas of the most active EU-Russia cooperation, in particular, through the Parliamentary Cooperation Committee.

9.4. While preserving Russia’s systems of standards and certification, to harmonize them with the respective systems in the areas of the most active trade and technical cooperation between Russia and the EU. To promote broader application of the ISO standards. To pursue a line to the mutual recognition of certificates, in particular, through establishing the joint certification centres.

10. Cooperation in the law enforcement sphere.

10.1. To establish operative cooperation with existing and newly established EU bodies and mechanisms competent in the field of fighting international terrorism, illegal drug trafficking, transnational organized crime, including money laundering, tax evasion, illegal capital export, violations of customs regulations, traffic in persons, unwarranted intrusions into data bases, counterfeiting. To continue active work aimed at establishing and developing cooperation with Europol.

10.2. To use for these purposes, to the extent possible, participation in EU programs and plans for fighting crime and training staff, including technical assistance programs. To develop cooperation of judicial authorities in civilian and criminal cases, customs, tax and other law enforcement bodies of Russia and the EU and its member states, including through the exchange of liaison officers.

10.3. To work towards supplementing the PCA with a special agreement in law enforcement.

10.4. To establish cooperation of competent bodies of Russia and the EU in fighting illegal migration, including from outside of Europe.

10.5. To seek assistance by the EU countries in ensuring the inevitability of punishment for those violating the Russian economic and currency legislation. To establish interaction in tracking and, if possible, returning capital illegally removed from Russia into the country of its origin, to study the possibility of its use for repaying part of Russia’s debt EU countries or for encouraging economic cooperation between the parties.

11. The role of business circles in cooperation development.

11.1. To do utmost to promote contacts between Russian and EU enterprises and their associations, including for developing trade and economic as well as investment cooperation, for sharing experience in market activities and prevention of commercial disputes. To enhance the role of the Russia-EU industrialists Roundtable and - if necessary - to consult it on key issues and draft decisions, to focus its activity on attracting European investments to Russia, on expanding and industrializing Russian exports, scientific and technological cooperation.

11.2. To find forms of efficient consideration and representation of business circles’ interests in the working bodies of Russia - EU cooperation.

12. Ensuring the implementation of the Strategy inside Russia.

12.1. To proceed from the assumption that, in addition to evolution within the EU and development of the international situation, the successful implementation of this Strategy will, to a major extent, depend on the organizational and legal, as well as material support for the realization of its provisions in Russia.

12.2. To ensure and pursue a common state policy in relations with the EU, primarily through the activities of the Governmental Commission of the Russian Federation on Cooperation with the European Union and the active coordinating role of the Russian MFA. To perform a special assessment of draft legislative acts and other regulations as to their conformity to the APC with the aim of preventing possible conflicts.

12.3. For further development of cooperation and monitoring the implementation of the PCA by the European Union and its member states:

- To work towards establishing in all state authorities dealing with the issues of Russia-EU cooperation of teams of experts competent in the issues of the EU activities and its cooperation with Russia;

- To establish and update an elaborate and accessible information system for Russian entrepreneurs about the EU activities and their advantages and obligations on the European Union market, stemming from the PCA and other bilateral documents;

- To organize in the Permanent Mission of Russia to the EU and Russian embassies in member states and prospective EU members monitoring of the implementation by the European Union of the PCA provisions and decisions of its working bodies, as well as of the search for a new potential to develop cooperation.

12.4. To work for ensuring operative development and adoption of legislative acts and other regulations governing the development of Russia-EU cooperation and implementation by the Russian side of obligations assumed. To actively extend interparliamentary cooperation of the parties to cover the priority areas of interaction between Russia and the EU.

12.5. To take measures to intensify training in Russian higher educational establishments and business schools of specialists in various fields of activities of the European Union and Russia-EU cooperation, as well as expand scientific research in these topics. To encourage scientific exchanges and training of highly qualified Russian personnel using the opportunities provided by the European Union and its member states.

12.6. To make the most efficient use of the TACIS program resources for the implementation of this Strategy.