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Title: The%20Future%20of%20EU-Russia%20economy%20(mid-term)%20perspective%20and%20EU%20interests


1
The Future of EU-Russia economy (mid-term)
perspective and EU interests
2
Agenda
EU Russia pros and cons
Economic cooperation
Social cooperation
Future prospects
3
Agenda
EU Russia pros and cons
Economic cooperation
Social cooperation
Future prospects
4
PROs (positive forces towards cooperation)
  • Strong economic interrelations
  • The E.U. provides 80 of cumulative foreign
    investment to Russia,
  • Russia is the E.U.s 3rd most important trading
    partner.
  • Common security interests Russia as a key
    geopolitical partner for EU. Common goals against
    rising India China, world terrorism, loss of
    leadership in technology, illegal migration,
    organized crime, cyber crime, climate change, and
    the conflict of civilizations.
  • Energy issue Russia is the most important
    supplier to the E.U. not only of gas and oil, but
    also of coal and uranium.
  • Russia as one of the largest holders
  • of euro-denominated assets in the world.
  • Research, education and culture
  • strong mutual interest in nuclear safety,
    education
  • (Bologna process), exchange of know-how.
    Russia needs new
  • technologies, EU needs developed Russia to
    continue provide
  • resources.

42 of EU gas comes from Russia
5
CONs (negative forces towards conflict)
  • Inconsistent, bi-lateral policy of EU gtRussia.
    EU needs to restructure and act as a Unit with a
    certain defined position.
  • Russian straightforward foreign policy
  • Georgian conflict,  
  • unilateral recognition of Abkhazia and South
    Ossetia
  • Chechnya issue
  • Raising concerns about stability of gas supplies
    Ukrainian conflict insufficient upstream
    investments in the face of expanding demand.
  • Old and out of date PCA, as a main strategic
    document. Need for a new document.
  • No common strategic vision on future cooperation
    Russian and EU leaders DONT SEE same reasons
    on WHY to closely cooperate
  • Example Partnership for modernization by
    Russia, Rostov summit 2010

EU vision political modernization (political
freedom human rights)
Russian vision technical modernization (know-how
and investments)
?
6
Agenda
EU Russia pros and cons
Economic cooperation
Social cooperation
Future prospects
7
Legislative base
  • Agreement of the USSR and EU "About trade,
    economic and commercial cooperation 1989
  • the Partnership and Cooperation Agreement
    1994(1997)
  • 4 road maps
  • On the space of freedom, safety and justice
  • On a Common Economic Space
  • On a Common Space of External Security
  • On the common space of science and education

8
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9
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10
Exported/imported services
  • Transport
  • Travelling
  • Communications
  • Constructing
  • Insurance
  • Financial services
  • Computer and information services
  • Royalty and license payments
  • Personal and cultural services
  • Governmental services
  • Other business services

11
Export of services
12
Import of services
13
Geographic structure of Russias goods export
  • 2000 Germany, Italy, Great Britain, The
    Netherlands, Finland
  • 2001-2002 Germany, Italy, The Netherlands, Great
    Britain, Finland
  • 2003 Germany, The Netherlands, Italy, Great
    Britain, Finland
  • 2004 The Netherlands, Germany, Italy, Finland,
    Great Britain

14
Geographic structure of Russias goods export
  • 2005 The Netherlands, Germany, Italy, Great
    Britain, Finland
  • 2006-2009 The Netherlands, Italy, Germany,
    Poland, Great Britain

15
Geographic structure of Russias goods import
  • 2000-2005 Germany, Italy, France, Finland, Great
    Britain
  • 2006 Germany, France, Italy, Finland, Great
    Britain, Poland (new)
  • 2007 Germany, Italy, France, Great Britain,
    Finland, Poland
  • 2008 Germany, Italy, France, Great Britain,
    Poland
  • 2009 Germany, France, Italy, Poland, Finland

16
Geographic structure of Russias services export
  • 2000-2002 Germany, Great Britain, Finland,
    France, Italy
  • 2003-2004 Germany, Great Britain, Finland,
    France,
  • 2005 Germany, Great Britain, Cyprus, France,
    Finland
  • 2006-2007 Germany, Great Britain, Cyprus, The
    Netherlands, Finland
  • 2008-2009 Great Britain, Germany, Cyprus, The
    Netherlands, France

17
Geographic structure of Russias services import
  • 2000-2002 Germany, Finland, Great Britain,
    France, Italy
  • 2003-2004 Germany, Finland, Great Britain,
    France, The Netherlands
  • 2005-2007 Great Britain, Germany, Finland,
    Cyprus, France
  • 2008-2009 Great Britain, Germany, Finland,
    Cyprus, The Netherlands

18
EU countries investments to the economy of
Russia(mln U.S.)
19
Russias investments to the economy of EU
countries(mln U.S.)
20
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21
Antidumping measures
  • According to the article VI GATT(the General
    agreement under tariffs and trade) the dumping is
    defined as a sale method for export at which the
    goods of one country are sold in another country
    at a price below normal.

22
  • Now it is necessary to result some figures
    testifying to gravity of given not tariff
    restriction for Russia
  • For December, 31st, 2007 the Community applied
    concerning Russia 11 definitive antidumping
    measures and did not apply any time antidumping
    measure. Obligations have been accepted
    concerning 5 of these 11 cases. The total cost of
    the import mentioned by these measures in 2007,
    has made 167 million that makes only 1,3 of
    all import of Russia. The size of the antidumping
    duties entered on Russian production in 2007, has
    made less 20 million. That means that the
    average level of the entered duty was somewhere
    about 12 .
  • For September, 30th, 2008 the Community applied
    antidumping measures concerning import of 12
    kinds of goods from Russia. Cost of the import on
    which the measures were imposed during first half
    of 2008, has made 93 million (1,5 of import).
    However the sum of the declared antidumping
    duties equaled only 3,4 million, i.e. the
    average duty was below 4 .

23
Prospects
  • EU expansion can have for Russia a number of
    negative consequences in trade - economic sphere
  • - A mode of quantitative restrictions for import
    of the Russian steel to EU.
  • - 12 measures of antidumping protection
    concerning export of the Russian steel products
    and chemical fertilizers
  • - Quota System for the Russian export of grain to
    EU.
  • - Losses in trading of fuel-energetic products
  • - Worsening the access to specialized markets
  • EU expansion has variety of the essential
    favorable aspects for economy of Russia.
    Especially in the long-term plan. Here are
    uniform rules of a competition, trade and
    transit, both stability of calculations and
    protection of the intellectual Russian property.

24
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25
Why Partnership of Modernization?
Modernization goals driven by EUs interest to
invest in and source reliably from Russia
Russia needs know-how
Russia forward!
Trade asymmetry
WTO membership
Asian boom
Stability
Modernization
vs.
  • Focus on stability after Gaidar-shock and crisis
    of 1998
  • Shift to modernization with the new presidency of
    Medvedev
  • EU highly dependent on Russian primary exports
    (gas, oil)
  • High-tech industry has been neglected, which
    results into dependence on manufactured goods.
  • Low level of foreign direct investments due to
    unfavorable investment climate
  • Tariffs and protectionism prolong WTO application
    procedure
  • Global markets put Russian industries under
    pressure
  • Production factors are globally mobile
    modernization as local competitive advantage

26
The Partnership of Modernization (PoM)
Main goal and objectives of the Partnership
to implement a concrete modernization of the
most important sectors of Russian economy and
society, in order to promote international
multilateralism and benefit to both parts in the
long run
Russian Federation
European Union
  • Increase business and cooperation opportunities
    with Russia
  • increase commitment in international
    institutions
  • concrete projects with a modernized partner
  • improve situation of EU countries, along Russian
    borders
  • standard alignment (economy, bureaucracy, policy
    etc.)
  • develop internal sectors
  • increase commitment in international
    institutions
  • increase trade
  • attract western investments
  • improve commitment with border countries

27
Implementation of the PoM
Possibilities of implementation in the four
spheres
Technology
Economy
Policy and governance
Research and education
  • energy efficiency
  • energy conservation
  • new fuels
  • nuclear technologies
  • space technologies
  • telecommunication
  • medical technologies
  • pharmaceuticals
  • IT
  • Six projects selected by Russian Government, with
    high potential of cooperation for EU.
  • stimulate investments
  • stimulate growth of small and medium enterprises
  • attract venture capitals
  • reform the very large public sector
    (privatization)
  • listing of mayor companies
  • improve financial market
  • standards (IAS/IFRS)
  • corporate law (premium)
  • taxation
  • reduction of state controls
  • corruption
  • clarify tasks of public administration
  • transparency
  • reform bureaucracy
  • simplify registration procedures for foreign
    companies
  • visa deal (with EU)
  • high level research centers
  • new modern universities in strategic areas
  • cooperation with EU universities
  • shared research projects with EU
  • attract EU experts

28
The Future of EU-Russia Energy Dialogue
  • Russia is a major player in world energy markets
  • Russia is reluctant to accept EU insistence on
    common regulatory regime in the energy area.
  • The EU is very much concerned about being
    over-dependent on the Russian oil and gas
    imports. (The Nabucco pipeline project. transport
    gas from Azerbaijan, Turkmenistan and potentially
    Iran across the Balkans to Western Europe)
  • Russia is moving from constructing transit
    pipelines to direct pipelines, mostly built
    offshore. Thus, it strengthens Gazproms
    bargaining power vis-à-vis transit countries such
    as Belarus, Ukraine and Moldova
  • Russia will continue to be Europes main
    suppliers of natural gas
  • EUs energy policy needs to address questions
    such as how to secure delivery and distribution
    of gas and how to provide more stable demand
    forecasts

29
Agenda
EU Russia pros and cons
Economic cooperation
Social cooperation
Future prospects
30
Social Cooperation - 1
Quality of life
Education
Culture
31
Social Cooperation 2. Goals
  • Quality of life
  • Sustainable and increasing quality of life
    healthcare
  • The implementation of the Decent Work Agenda
  • Education
  • largely promoting cooperation among universities
    and two-way mobility of students and academic
    staff
  • coordinating and synchronising actions within the
    EU and Russian research EU and Russian research
    programmes
  • Culture
  • improving mutual knowledge and understanding of
    each others culture
  • a special focus on strengthening the European
    identity and opportunities for synergy

32
Agenda
EU Russia pros and cons
Political cooperation
Economic cooperation
Social cooperation
Future prospects
33
Opportunities (what can be done to support
further cooperation)
  • Development and adoption of new PCA. Should be
    not a nominative document, as four common
    spaces is, but a detailed one, delivering common
    strategic vision for future cooperation
  • The EU expects the New EU-Russia Agreement to
    provide for a comprehensive legally binding
    framework to cover all main areas of the
    relationship based on our shared interests and
    the international commitments which the EU and
    Russia have entered into, including promoting
    respect for human rights and the rule of law.
    Moreover, in order to underpin our growing
    economic interdependence a Free Trade Area (FTA)
    would be of mutual interest.
  • Acceptance of Russia into WTO - enlargement and
    further development of economical relations
    (should finish by end of 2011).
  • Creation of free travel zone with Europe visas
    as huge barrier for business and cultural
    cooperation of Russia-EU (in discussion).
  • Partnership for modernization further
    development of
  • the concept in order to arrive to the common
    vision.

34
Threats (what can ruin further cooperation)
  • EU continues to act inconsistently towards Russia
  • Russian bi-lateral conflicts with EU countries.
    Example conflict with Georgia. Georgia is
    opposing Russias acceptance into WTO, using its
    members veto right.
  • US implicit or explicit intervention into
    Russia-EU relations
  • New problems with gas supply
  • Results of presidential elections of 2012 in
    Russia

35
Ways to future-1
  • EUs view The future of EU-Russia relations, a
    way forward in solidarity and the rule-of-law.
    February, 2009.
  • Basis for a better EU-Russia relationship
    neither confrontation, nor isolation, nor
    unconditional cooperation, but a policy based on
    solidarity and the rule of law. Lets act
    together and influence our relationships with
    Russia.
  • Putins view Russia and Europe From learning
    the lessons of the crisis to a new partnership
    agenda., November 2010.
  • our joint attempt at achieving success and
    competitiveness in the modern world,
  • Common economic policy free trade zone, Russias
    WTO accession, joint projects RU resources EU
    technology, common European energy complex (to
    avoid gas transit countries)
  • Supporting science and education
  • Removing barriers visa-free regime for business
    and educational cooperation

36
Ways to future-2
  • Sergey Karaganov, Chairman of the Presidium of
    the Council on Foreign and Defense Policy (CFDP),
    Dean of the School of the World Economy and
    International Affairs of the State
    UniversityHigher School of Economics, September,
    2010
  • way towards creation of Alliance of Europe in
    order to oppose 2 existing poles

Ukraine
Russia
Alliance of Europe
China
USA


Turkey
Kazakhstan
37
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