Russia piles pressure on former Soviet satellites to drop EU aspirations

As the Vilnius summit of EU’s Eastern Partnership draws nearer, at which several former Soviet states are expected to sign association agreements with the EU, Russia appears to have stepped up efforts to pull those same former Soviet states closer and into its own Customs Union, with mixed results.

On the surface, it appears to be a simple choice between which free trade agreement would offer those countries a better economic incentive – but where the EU can wield the carrot of foreign aid, Russia leans on the stick of threatening to withhold energy resources (and, unlike the EU, could not care less about asking for lasting reforms).

In the long run, Russian president Vladimir Putin sees the Customs Union as the building block of the Eurasian Economic Union – outlining its key institutions in an article he penned for Russia’s newspaper of record, Izvestia, in October 2011.

Despite pointing out in that piece that that the new entity was not meant to hijack the EU aspirations of former Soviet republics, it has become clear that at the very least the Eurasian Union is meant as a counterweight to the EU, but also a way to bring the former Soviet states closer into Russia’s orbit in a way that the Commonwealth of Independent States (which former out of the ashes of the Soviet Union in December 1991) never quite managed.

One of the four countries expected to initial an association and free trade agreement with the EU at the Eastern Partnership summit in Vilnius in November, Armenia, has now given in to Russian wooing, announcing that it would join the Moscow-led Customs Union.

Given the government change in Georgia, which has lead to the thawing of relations with Russia, Tbilisi could be expected to follow suit. Indeed, pro-Russian prime minister Bidzina Ivanishvili said on September 4 that his government was “studying” the customs union issue, although that statement was later clarified to mean that membership was not an option, Radio Free Europe/Radio Liberty reported.

But in Moldova, Russia’s efforts have been unsuccessful so far, prompting a deputy Russian prime minister to make not-so-subtle threats that the country could find itself freezing come winter. And the big prize, Ukraine, appears also out of the Kremlin’s grasp.

Abrupt announcement

Armenian president Serzh Sargsyan’s announcement on September 3, following talks with Putin in Moscow, appeared to take the EU by surprise.

“We look forward to understanding better from Armenia what their intentions are and how they wish to ensure compatibility between these and the commitments undertaken through the Association Agreement and the Deep and Comprehensive Free Trade Area,” the European Commission said in a statement. “Once this consultation has been completed, we will draw our conclusions on the way forward.”

Trade war

Most recently, Rospotrebnadzor banned, in August, all confectionery made by Ukrainian firm Roshen, claiming it contained carcinogens. Similar checks carried out in several other countries reportedly found no problems.

Chocolate is not the only Ukrainian products not welcome on the Russian market – Russia recently scrapped the quota for Ukrainian steel pipes. Furthermore, some Ukrainian companies have complained in recent weeks about harassment by Russian customs officials.

Most recently, Russian authorities plan to bill Ukraine for all the taxes Ukraine has collected from goods delivered to Russia’s Black Sea fleet, stationed under a long-term lease on Ukrainian territory, Russian daily Nezavisimaya Gazeta reported on September 4. Russia estimates the figure at an annual $10 million to $15 million.

(A dispute there could end costing Russia more than Ukraine, since Moscow pays only $98 million a year to lease the fleet’s base, built during the Soviet times – Ukrainian opposition parties have long been demanding a review of the leasing agreement, which currently runs until 2042.)

Full article: Russia piles pressure on former Soviet satellites to drop EU aspirations (The Sophia Globe)

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