TRADE with the European Union
Michael Geistlinger
University of Salzburg
Please, Remember the Origin
Agreement between the European Economic Community and the European Atomic Energy
Community and the Union of Soviet Socialist Republics on Trade and Commercial and
Economic Cooperation of 18 December 1989, OJ L 068, 15/03/1990 P. 0002 – 0017.
General Characteristics of the
EEC/EURATOM – USSR Trade
Agreement
-
- Wish to Establish Direct Contractual Relations
- Complement and Extend Bilateral Relations of the Member States
- Implement Final Act Helsinki CSCE
Favourable Conditions for Harmonious Development and Diversification of Trade and
Economic Cooperation Based on Equality, Mutual Benefit and Reciprocity
- Consider Potential for Mutual Trade and Economic Cooperation
- Favourable Contribution to Economic Restructuring in the USSR
- Reference to Direct Relations between CMEA and EEC
Contents of the EEC/EURATOM –
USSR Trade Agreement
• Trade in goods, except coal and steel, originating at treaty
partners
• Most favoured-nation treatment
• Relief from duties, taxes etc.
• Applicable regulations
• Highest possible degree of liberalization of imports of the
other‘s products
• Abolition/elimination of quantitative restrictions, at least
liberalization
• Export licences, open import quotas
Contents of the EEC/EURATOM –
USSR Trade Agreement ff
• Treatment of goods at market-related prices
• Avoidance of conflict situations, consultations
• Measures to be applied the least disturbant ones
• Exchange of commercial and economic information
• Cooperation in vocational training, simplification of customs
documentation and procedures, etc
• Encouragement of trade promotion activities
• Guarantees of property rights
• Encouragement of contacts between business associations
Contents of the EEC/EURATOM –
USSR Trade Agreement ff
• Free choice of trading pattern
• Favourable business regulations
• UNCITRAL arbitration
• Adequate protection and enforcement of industrial,
commercial and intellectual property rights
• Economic cooperation in order to strengthen and diversify
economic links, contribute to development of standard of
living, encourage environmentally sound policies, etc
• Cooperation in statistics, standardization, industry etc by
facilitating exchanges and contacts between persons etc
• Joint Committee for Implementation and Monitoring
The status quo: Lack of
Multilateralism

EU on the one hand

States of the Regions on the other hand

Disadvantages for States of the Regions:




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Lack of Equality
Lack of Bargaining Power
Subject to Dictates of Treaty Conditions and Contents
Subject to Interventionist Behaviour and Treaty Regimes
Subject to Primacy of Foreign Politics over Trade Interests
Focus on Caucasus
 Armenia (WTO member since 2003)
 Azerbaijan (No WTO member)
 Georgia (WTO member since 2000)
The Legal Framework as to the EU
 Armenia: Partnership- and Cooperation Agreement, OJL 239, 9
September 1999, p. 1 – 50: 99/602/EC, ECCS, Euratom Council
and Commission: Decision of 31 May 1999.

 Azerbaidjan: PCA, OJL 246, 17 September 1999, p. 1 – 2:
99/614/EC, ECCS, Euratom: Council and Commission Decision
of 31 May 1999.
 Georgia:PCA, OJL 205, 4 August 1999, p. 1 – 2: 99/515/EC,
ECCS, Euratom: Council and Commission: Decision of 31 May
1999.
Some Examples from the PCA
EC/Azerbaijan of 26 April1996
-Objectives of the Partnership:
-To provide an appropriate framework for the political dialogue
between the Parties allowing the devlopment of political relations
(art 1, first line)
-- To support the Republic of Azerbaijan‘s efforts to consolidate its
democracy and to develop its economy and to complete the transition
into a market economy (art 1, second line)
-- To promote trade and investment (art 1, third line)
-- To provide a basis for legislative, economic … cooperation (art 1,
fourth line)
EC‘s/EU`s Understanding of Political
Dialogue (Title II, arts 5 – 8)



Strengthen the links between Azerbaijan with the EU and ist
Member States, “and thus with the community of democratic
nations as a whole“: EU defines “democracy“
Increase convergence of positions on international issues of
mutual concern: EU defines “position in issues of mutual
concern“
Observe the principles of democracy, and the respect and
promotion of human rights, particularly those of persons
belonging to minorities: EU defines understanding of “human
rights, including those of minorities“
EC‘s/EU‘s Understanding of
„Legislative Cooperation“ (title V,
art 43)


Approximation of laws: customs law, company law, banking
law, company accounts and taxes, intellectual property,
protection of workers at the workplace, financial services,
rules on competition, public procurement, protection of
health and life of humans, animals and plants, the
environment and legislation regarding the exploitation and
utilisation of natural resources, consumer protection, indirect taxation, technical rules and standards, nuclear laws and
regulations and transport. One way road from EU to Az
Safeguarded by: exchange of experts, early information,
seminars, training activities, translation of EU legislation.
EC‘s/EU‘s Understanding of
Economic Cooperation (title VI,
arts 44 – 70

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Community participation in Az‘s efforts to restructure its
industry (art 46 para 1 2nd line)
Enforcement of EU competition rules (art 46 para 2)
Promotion of the use of EU technical regulations and the
application of European standards (art 50 para 2 2nd line)
Promotion of teaching in the field of European studies (art 53
para 2 5th line)
Teaching EU languages (art 53 para 2 6th line)
Approximation of Az standards to EU technical regulations as to
industrial and agricultural food products (art 54) etc
EC‘s/EU‘s Understanding of
Democracy and Human Rights
Art 71 in full directed towards Azerbaijan
The Other Side of the
Medal:Advantages for Azerbaijan
- Temporary financial assistance from the EU (title X, arts 77 – 80) .
Options for Multilateralisation on the
Regions‘ Side
- The CIS Free Trade Zone or CIS directly (CIS
FTZ/CIS)
- The Eurasian Economic Community (EAEC)
- The Shanghai Cooperation Organisation (SCO)
- The Eurasian Economic Union (EEU, from 2015
onwards)
- The Centralasian Cooperation (CAC) (de facto
abolished in 2005)
- .
Preconditions
- Membership of all states of the regions
(Central Asia, Caucasus):
- - Two major issues: Georgia/Russia,
Azerbaijan/Armenia
- - Rivalries of EU/Russia for political
influence on the regions, at least interest in
the regions on Chinese side
The Key Issues Pending
Options
- CIS, CIS/FTZ): Rather loose organisational
framework, not sufficient to balance EU, in
addition dominating influence of Russia (eg
gas price),
- SCO: Weakest organisational framework,
influence of Russia neutralised by China, not
at all balancing EU, at least for a while
Options ff
-
-
-
EAEC, once developed into EAU: strongest organisational
potential and real option for balancing the EU.
- Concept of international activity of EAEC 2007: commitment
to UN, development of partnership on international level,
cooperation for a more just international trading system,
equality and respect of mutual interests, strengthening of
regional stability and economical safety, respect of
international law, territorial integrity, cooperation within WTO,
considers EU as structural partner in the interests of sustainable
development, cooperation with OSCE.
- Concept has potential for balancing EU‘s, Russia‘s and
China‘s interests in the regions.
There is a German Saying:
MANCHER HANDEL IST WIE
EIN IGEL,
WO MAN IHN ANGREIFT, DA
STICHT MAN SICH.
НЕКОТОРОЕ ТОРГОВЛЯ –
ЭТО КАК ЕЖ: ГДЕ ТЫ
ХВАТАЕШЬ ЕГО, ТЫ
КОЛEШСЯ.
SOME TRADE IS LIKE A
HEDGEHOG: WHERE YOU
TOUCH IT, YOU PRICK
YOURSELF.