Russia Considers Protective Trade Measures against Moldova

10 July 2014

The Eurasian Economic Commission is considering the possibility of taking “protective trade measures” against Moldova following the signing of an Association Agreement between Chișinău and Brussels in June, Russian officials have said over the past week. The group is expected to discuss these potential measures at a Council meeting on 16 July.

The EU-Moldova deal – which includes a trade pact – will seriously affect the latter’s economic ties with EEC members Russia, Belarus, and Kazakhstan, Russian Prime Minister Dmitry Medvedev has warned. The latter three countries currently have a customs union between them, which is set to become an economic union next year.

Furthermore, the Russian premier has said, the new deal – which has already been ratified by the Moldovan Parliament – complicates Moldova’s existing trade arrangement with Russia under the Commonwealth of Independent States (CIS), which is comprised mostly of former Soviet Republics.

These two trade blocs, Medvedev said, will now need to re-evaluate their existing relationships with Chișinău in light of the latter’s deepened ties with the EU, claiming that there are legal mechanisms under both the CIS and the WTO to do so. Of the three EEC members, Russia is the only one that is also part of the World Trade Organization.

Medvedev has also said that similar measures could be taken towards Ukraine and Georgia in the case that they ratify their respective Association Agreements with the EU.

Russia considers the Moldova-EU Association Agreement and the subsequently expected flow of duty-free goods from the EU to Moldova to be a risk to Russian markets, particularly the agricultural sector.

Russian First Deputy Prime Minister Igor Shuvalov has said that the Kremlin needs to examine “all opportunities that exist” to protect Russian market interests.

EU officials have continued to stress that the Agreement is not meant to harm Moldova’s ties with Russia and that it is indeed compatible with the existing CIS arrangement. EU officials have also urged Moscow to avoid engaging in any punitive actions against Chișinău.  (See Bridges Weekly, 26 June 2014).­

Moldova, Georgia, and Ukraine have been at the centre of a prolonged diplomatic and economic row between the EU and Russia, who have both been trying to integrate these Eastern European states into their respective economic unions. (See Bridges Weekly, 3 July 2014).

ICTSD reporting; “Russia Will Protect its Market in Case of EU Association with Georgia And Ukraine,” ITAR-TASS, 7 July 2014; “Russia Needs to Make Quick Decision on Free Trade With Moldova – Medvedev,” RIA NOVOSTI, 7 July 2014; “Eurasia Economic Commission to Consider Protective Trade Measures With Moldova – Moscow,” RIA NOVOSTI, 7 July 2014; “Eurasian Economic Union Council to Debate Protective Measures in Trade Ties With Moldova,” ITAR-TASS, 7 July 2014.

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