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What does the Association Agreement mean for Georgia and Moldova? Myths and Reality

The last Eastern Partnership (EaP) summit held in Vilnius on the 27th-28th November 2013 saw the finalization of the negotiations on the EU-Moldova and EU-Georgia Association Agreement (AA), including a Deep and Comprehensive Free Trade Agreement (DCFTA). The time has now come for bilateral signature, which will take place in Brussels on the 27th of June.

After the signing ceremony, the implementation phase will start and will run for a long period of time, with regular assessments and updates being done. Most of the changes implied by the AA/DCFTA are structural ones, impacting the economic structures, the judicial system and the trade rules. The AA enjoys a strong political support in Moldova and Georgia, whereas its popular support is rather middling. The later is always difficult to evaluate, but it can be asserted that roughly half of the Moldavian and Georgian populations wish their countries to come closer with the EU, whereas another part of the inhabitants oscillates between indecision and opposition. This general picture should be nuanced according to regional distortions. The regions like Transnistria or Gagauzia remain largely euro skeptic and pro-Russian. However, one can wonder about the reasons of this position. As official acronyms and texts are not really user-friendly, some misunderstandings have developed and deserve further attention. I suggest here to separate the facts from fiction and to analyze what this agreement specifically means for Moldova and Georgia.

Myth 1: Gay Marriage Legalization

One of the main clichés, fed by an intense propaganda, is that the AA will force Moldova and Georgia to legalize the gay marriage. This is far from the reality for several reasons. First of all, the right for the same sex couples to get married is in force only in nine EU countries and is not about to be legalized in the majority of the EU members. The EU has no competence in family law and cannot force one of its member and a fortiori an associated state to pass any law in this matter.

Nevertheless, the EU has at its core value to respect minorities, including sexual one, and does ask Moldova and Georgia to introduce legislation to protect citizens against discriminations. This is a requirement falling under the Visa Liberalization Action Plan. The measures taken to protect citizens against discriminations and those legalizing the gay marriage are fully dissociated and should not be pulled together.

The EU supports anti-discrimination measures in all spheres. Source: www.duelamical.eu.

Myth 2: Limited Trade with CIS

The 15 chapters, 14 annexes and 3 protocols of the DCFTA make its consequences unclear also in the economic field. The DCFTA implies a free trade area, which means a reduction of trade barriers (tariffs and quotas), but does not imply a common external tariff (same policies with respect to non-members). In other words, Moldova and Georgia can continue trading with other countries, including Russia, and the Commonwealth of Independent States (CIS) under the existing conditions. The DCFTA is compatible with other free trade agreements that Moldova and Georgia are parts of.

In contrast, becoming a part of a customs union envisages a depravation of sovereignty in conducting its own trade policy. When joining such union, a country has to agree on the same trade policy inside the union and vis-à-vis third countries. However, under the DCFTA, Moldova and Georgia remain entirely free to decide on its trade relations with other countries.

Myth 3: Death to National Producers

Another great fear about the DCFTA is the alleged risk for Georgian and Moldavian markets to be flooded with the EU goods, whereas local goods will have little access to the EU market due to high standards and enormous regulations. This notion can be opposed with several arguments. Once the AA is in force, the market will open asymmetrically in favour of Moldova and Georgia. In the long term perspective, these states will be highly supported by the EU through Neighbourhood Policy Instruments (mainly budget support, but also twinning and technical assistance).

This gradual approach is not only used toward new countries, but also toward member states when they need to implement a new legislation.Business sector and particularly export companies are expected to benefit immediately from the AA. Citizens as well will enjoy quick benefits as imported goods from the EU will be cheaper. In the medium/long term, the Agreement should boost investments and therefore create new jobs and modernize several sectors of the economy.

Additionally, EU standards and norms enjoy a worldwide recognition and adopting them will open up new opportunities, not only in EU-Georgia or EU-Moldova trade, but also in Moldova/Georgia’s trade with the rest of the world. New regulations are expected to strengthen the economic environment and encourage trade relations and foreign investments. This virtuous circle should lead to a significant economic growth (5.4% per year is expected for Moldova; 6.3 % for Georgia).

The EU is hardly about downgrading national producers. Source: www.euinside.eu

Myth 4: Against Russia

Last but certainly not least, the AA/DCFTA is not tailored to put Georgia and Moldova against Russia. The EU neighbourhood policy aims at promoting the regional prosperity and cooperation to foster stability. In 2012, the EU was awarded with the Nobel Peace Prize “for over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe”. This is not to engage two years later in a warmongering attitude.

Back in 2008, the EU invited Russia to be associated as a strategic partner to the EaP. Russia declined this offer, and it was replaced by the EU-Russia Partnership for Modernization. This agreement can hardly be developed further, as Russia favours a bilateral approach with the EU Member States, and EU national leaders remain divided on their position towards Russia.

The EU is not engaged in a geopolitical competition with Russia, its all narrative and actions seeking to prove this point. The AA can be used as a force for peaceful conflict resolution, including the regions such as Transnistria, Gagaouzia, Abkhazia, and South Ossetia. So, the AA/DCFTA recognizes and strengthens both Moldova and Georgia’s sovereignty. Particularly, increasing economic growth and boosting jobs creation, which the EU is concerned with, are usual drivers of enhancing political stability and therefore state viability.

Indeed, the AA/DCFTA leaves a room for interpretation, as this agreement is also what decision makers make of it. Cooperation with the EU remains based on self-commitment, the more Moldova and Georgia will engage, the more the cooperation will be deepened.