Foreign Affairs on March 16 – April 1, 2011

European integration

European Parliament prolonged the Autonomous Trade Preferences (ATP)

On 25 March, European Parliament passed the decision of European Commission on extending for Moldova the period of taking advantage of Autonomous Trade Preferences (ATP) for another three years (from December 2012 until 2015) and on increasing the quota for some Moldovan products exported to the EU (wine, wheat, corn, barley).In 2011 Moldova will export to the EU market 15 million litters of wine, and since 2012 — 24 million litters of wine, while export quota for wheat, barley and corn will rise by 2015 to 65 thousand tons of wheat, 60,000 tons of barley and 55,000 tons of corn.

ADEPT Note: For comparison, in 2010 Moldova exported to Russia 308 million litters of wine, of which over 2 million litters were detained under decision of Rospotrebnadzor on the grounds that it would not meet hygienic standards.

Visits of Moldovan officials to Brussels

In the second half of March, Brussels became a destination for a number of Moldovan officials that shows a continuing dynamism of the political dialogue between Moldova and European Union. The first official, who paid a visit to Brussels, heading a parliamentary delegation, representing all parliamentary groups, was Marian Lupu, Chairman of Parliament and the country’s interim President. In Brussels, Marian Lupu met with Herman Van Rompuy, President of the European Council, Jerzy Buzek, European Parliament President Miguel Angel Martinez, Vice President of the European Parliament, Stefan Fule, Commissioner for Enlargement and European Neighbourhood Policy, Dacian Ciolos, Commissioner for Agriculture and Rural Development and Monica Macovei, co-Chairperson of European Parliament Delegation to the EU — Moldova Parliamentary Cooperation Committee. One of the issues raised during the discussions was the political situation in Moldova and the perspectives to elect the head of state. According to European officials, the failure of presidential elections and possible early elections will reduce the confidence that the EU currently grants to Moldova. It is important for the current ruling alliance to establish relations of cooperation with the opposition, both for the presidential election, as well as for further implementation of internal reforms. At the same time, the European officials have assured that despite recent political developments in Maghreb states, the Union will continue to support the Eastern Partnership and in particular the reforms in Moldova. In this context, Marian Lupu called for support to accelerate the consideration by the EU member states of the issue of granting the mandate to European Commission to start negotiations with Moldova in order to establish Deep and Comprehensive Free Trade Zone with the EU as part of the Association Agreement.

Shortly thereafter, the Prime Minister Vlad Filat paid a working visit to Brussels, during which he also attended the summit of the European People’s Party and met with Herman Van Rompuy, President of the European Council, Siim Kalas, European Commission Vice-President, European Commissioner for Transportation, Stefan Fule, European Commissioner for Enlargement and European Neighbourhood Policy, Cecilia Malmström, EU Commissioner for Home Affairs and Karel de Gucht, European Commissioner for Trade. According to the government’s press serviceRO, the Prime Minister has approached in talks with European officials the issues related to liberalization of visa regime, the establishment of Deep and Comprehensive Free Trade Zone with the EU (DCFTA), preparation of the Partnership and Cooperation Council meeting of May 5 2011, the EU support for reforms launched by the Government, especially those aimed at law enforcement, implementation of the “Rethink Moldova” etc. The European officials appreciated the progress made in implementing the Action Plan on the implementation of recommendations of the European Commission for establishing the Deep and Comprehensive Free Trade Zone with EU, and first progress report was submitted to the European Commission on 14 March 2011. At the same time, the European Commission expressed its support for further reforms in justice and home affairs, committing to provide in this regard 50 million euros, of which 10 million will be allocated at the end of 2011. Another topic discussed during the talks was about launching negotiations on accession of Moldova to the European Joint Aviation Area (ECAA), and the European Commission shall submit for approval by EU member states of the decision to initiate such negotiations with Moldova.

European Union continues to provide advisory support to the Republic of Moldova

At the end of March, the EU delegation in Chisinau has presented to Moldova’s Prime Minister the new team of international consultants who will assist the Government in the European Union High Level Policy Advise Mission. Launched on 15 March 2010 and expected to be implemented until 15 January 2012, this project aims at providing advisory support to central ministries and institutions of central public administration in developing and implementing public policies and accelerating the economic association and integration of Moldova into the European Union. In 2011, the team of advisors will include 15 people who will advise: Prime Minister’s Office, Tax Inspectorate, Ministries of Justice, Finance, Agriculture and Food Industry, Economy, Transportation, Environment, Interior, Office of Migration and Asylum, the Customs Service, CCECC, Prosecutor General, Public Procurement Agency.

In the same period another twinning project was launched “Support for the implementation and observance of the policy on competition and state aid in Moldova”RO, worth a million lei, financed by the European Union.Within the project the National Agency for Competition Protection (NACP) and central governmental bodies will benefit from the advice of experts from Austria, Romania and Latvia in the development and implementation of the policy on competition and state aid.

Bilateral cooperation

Republic of Moldova — Romania

On March 16, Foreign Affairs Minister, Iurie Leanca, paid a working visit to Bucharest, where he held talks with his Romanian counterpart Teodor Baconschi and Romanian President Traian Basescu. Following the meetings, they agreed on enhancing the cooperation between Romania and Moldova in the field of energy. In this regard, a new chapter on cooperation in the energy field will be introduced in the Grant Agreement worth 100 million euros concluded between the two states. The ministers also agreed that the joint meeting of the governments of Romania and Moldova will take place in June. The meeting will be accompanied by a bilateral economic forum to attract investments into the Moldovan economy.

Republic of Moldova — Russian Federation

Moldovan-Russian political dialogue has witnessed an increase in the second half of March, following several meetings between ministers of the two states who have tried to bring back on the bilateral agenda a number of sensitive issues related to trade and economic cooperation and the problem of Transnistrian resolution.

On 16–17 March in Moscow took place the twelfth session of the Moldovan-Russian Intergovernmental Commission for Economic CooperationRU. The Commission considered several sensitive issues of economic and trade cooperation between Moldova and Russia: negotiations on Free Trade Agreement within the CIS, the issue of historical debts for Russian gas, negotiation on tariff for the transit of Russian gas through Moldova, export of Moldovan agricultural and wine production to Russian market. According to Economy Minister, Valeriu Lazar, co-chairman of the Commission, following the discussions the parties have agreed: a) to delimit the historical debts for Russian gas by creating separate companies in Chisinau and Tiraspol, 2) to sign a new contract for the supply and transit of Russian gas by raising the tariff of transit through Moldova, 3) to consider the possibility to liberalize the air transportation between the two countries, 4) Moldova shall examine the possibility to provide the Cuciurgan Power Station (the owner is the Russian Inter-State Corporation RAOES) with the license to produce electricity for a period of at least 1 year, 5) to open additional customs terminals for Moldovan wine exports and to simplify the export procedure, while intensifying the quality control of exported products etc. At the same time, the Russian side asked Moldova to exclude ecological taxes from Russian exporters for the use of “tetra-pack” packaging, considering them as discriminatory in relation to local producers.

On March 29, a working visit to Moscow was also paid by Moldovan Foreign Affairs Minister, Iurie Leanca. The main issue discussed during the meeting with his Russian counterpart, Sergey Lavrov, was the settlement of Transnistrian conflict. Sergey Lavrov supportedRU the necessity to reform the peacekeeping operation in Transnistria in a multinational civil mission with an international mandate. The Russian Foreign Affairs Minister also said that Russia advocates for the withdrawal of Russian weapons left in Transnistria, but this can not be fulfilled without the consent of Transnistrian administration, which insists on withdrawal of armament only within the settlement process. During the discussions the ministers also signed an Inter-ministerial Consultations Plan for 2011 and Humanitarian Cooperation Program for 2011–2013.

ADEPT Note: The solution for the delimitation of Moldova’s debts for Russian gas between Moldova (debt of USD 350 million) and Transnistrian separatist administration (debt of USD 2 billion) has been criticized by many experts considering this measure as a first step towards political and economic separation of the separatist Transnistrian region and Moldova and a new blackmail lever against Moldova in the hands of the Russian Federation.

Moldova — Ukraine

Moldovan-Ukrainian relations continue to undergo through a tense period marked by the trade dispute between the two states — on the one hand, due to taxes charged by Moldova on products imported in plastic packaging or tetra pack (the so-called eco-duty) and on the other hand, due to high excise taxes imposed by Ukraine for Moldovan divine, both states assessing as discriminatory the measures applied by the other side. This dispute is supplemented by frequent accusations raised by the Ukrainian side against Moldovan counterparts about neglecting the previously taken commitments to transmit the road near the village of Palanca to Ukrainian party.

However, in the second half of March, there are some signs of a possible recovery in relationship. Thus, as result of prior consultations between Ukraine and Moldova within the World Trade Organization (WTO), held in Geneva on March 18, Moldovan Ministry of Economy stated it was planning to exclude environmental duty. Meanwhile, in Kiev, Moldovan ambassador, Ion Stavila, had a meetingUA with Chairman of Ukraine Supreme Rada, Vladimir Litvin, with whom he discussed the activation of Moldovan-Ukrainian inter-parliamentary dialogue and a more active involvement of the parliaments of both countries in resolving bilateral issues.

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