Expand EU free trade eastwards, say MEPs

The EU must build deep and comprehensive free trade areas with its eastern neighbours to help them pursue democracy and prevent conflicts in the region, says a resolution passed by MEPs on Tuesday. Parliament makes specific recommendations to each of the six ex-USSR countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) in the EU's Eastern Partnership.

"The central aim of the report is to promote and strengthen the rule of law and civil society in the EU's Eastern Partner countries" said rapporteur Miroslav Ransdorf (GUE-NGL, CZ), when presenting the report. The resolution was adopted Tuesday by a show of hands.

The EU is already the main export destination of most eastern partnership countries, but MEPs worry that China's economic presence in the region is growing, and that Russia could undermine the EU's trade negotiations with its eastern partners, e.g. by offering them lower gas prices. To help establish free trade areas, MEPs call on these partners to bring their national laws into line with EU legislation.

Armenia

MEPs are concerned about Armenia's close links between politics and business, less than transparent tax system and poor protection for investors. They also draw attention to the Nagorno-Karabakh dispute with Azerbaijan and point out that conflict with Turkey keeps Armenia economically isolated. Opening up Armenia's borders will help reduce its dependence on Russia, they add.

Azerbaijan

MEPs call on Azerbaijan to diversify its economy, noting that its reliance on oil, which accounts for half its GDP, makes it vulnerable to oil price volatility. They also call on the Azerbaijani government to make the country more attractive to foreign investors.

Belarus

Belarus' economic model and political standards are drifting away from the EU, says the resolution, noting that 80% of its companies are publicly owned and that 20% of Belarusians live below the poverty line.The resolution also notes the importance of Belarus as an energy transit country.

Georgia

MEPs note that Georgia has the highest alleged prevalence of pirated software of any eastern country and urge the Georgian authorities to tackle this problem. The resolution calls on Georgia to ensure that, after the conclusion of the free trade area negotiations, only products originating from regions formally recognising their adhesion to the Georgian state are eligible for trade preferences.

Moldova

Moldova´s economy is still fragile, but radical reforms have boosted its economic growth, notes the resolution, which also points out farm produce, which accounts for most of Moldova's exports, faces tough competition and strict requirements in the EU. 

Ukraine

MEPs worry about the negative effects of Ukraine´s business and investment climate, which can include barriers to market entry. They also call on the government to amend its laws to facilitate free and uninterrupted transit of gas to EU countries MEPs hope that the political obstacles to the signature of the Association agreement will soon be overcome.

Progress to date

Negotiations for a deep and comprehensive free trade agreement with Ukraine were completed in October 2011. The agreement will enter into force after the conclusion of the EU-Ukraine Association Agreement. The first rounds of negotiations with Armenia, Georgia and Moldova took place in spring 2012. Negotiations with Azerbaijan and Belarus cannot start before their accession to the WTO..

Procedure: non-legislative resolution