Procedure : 2006/2237(INI)
Document stages in plenary
Document selected : A6-0206/2007

Texts tabled :

A6-0206/2007

Debates :

PV 18/06/2007 - 16
CRE 18/06/2007 - 16

Votes :

PV 19/06/2007 - 8.25
CRE 19/06/2007 - 8.25
Explanations of votes

Texts adopted :

P6_TA(2007)0262

REPORT     
PDF 280kDOC 227k
24 May 2007
PE 378.755v02-00 A6-0206/2007

on EU economic and trade relations with Russia

(2006/2237(INI))

Committee on International Trade

Rapporteur: Godelieve Quisthoudt-Rowohl

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
 EXPLANATORY STATEMENT
 OPINION of the Committee on Foreign Affairs
 OPINION of the Committee on Economic and Monetary Affairs
 PROCEDURE

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on EU economic and trade relations with Russia

(2006/2237(INI))

The European Parliament,

–   having regard to the Agreement on partnership and cooperation establishing a partnership between the European Communities and their Member States, of the one part, and the Russian Federation, of the other part (PCA), which entered into force on 1 December 1997 and expires in 2007(1),

–   having regard to the Protocol to the Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Member States, of the one part, and the Russian Federation, of the other part, to take account of the accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic to the European Union(2),

–   having regard to the Protocol to the Partnership and Cooperation Agreement, establishing a partnership between the European Communities and their Member States, of the one part, and the Russian Federation, of the other part, to take account of the accession of the Republic of Bulgaria and Romania to the European Union(3),

–   having regard to the objective of the EU and Russia, set out in the joint statement issued following the St Petersburg Summit held on 31 May 2003, to set up a common economic space, a common space of freedom, security and justice, a space of cooperation in the field of external security and a space of research and education, including cultural aspects,

–   having regard to the subsequently issued Road Map for the Common Economic Space (CES) which was adopted at the EU-Russia Summit, held in Moscow on 10 May 2005,

–   having regard to the Agreement between the EU and Russia concluding the bilateral market access negotiations for the accession of the Russian Federation to the World Trade Organization (WTO), signed on 21 May 2004,

–   having regard to the Communication from the Commission to the European Council and the European Parliament of 10 January 2007 entitled 'An Energy Policy for Europe' (COM(2007)0001),

–   having regard to the Agreement between the EC and Russia on the modernisation of the existing system of utilisation of the Transsiberian routes (COM(2007)0055),

–   having regard to the Energy Charter Declaration of 1991 and the subsequent Energy Charter Treaty which was signed in December 1994 and which entered into force in April 1998,

–   having regard to the Statute of the Council of Europe, signed in London on 5 May 1949,

–   having regard to the Presidency Conclusions of the Brussels European Council, held on 15 and 16 June 2006(4),

–   having regard to the outcome of the 18th EU-Russia Summit, held in Helsinki on 24 November 2006,

–   having regard to the Presidency Conclusions of the Brussels European Council, held on 8 and 9 March 2007,

–   having regard to the Memorandum of Understanding (MoU) between the European Investment Bank (EIB), the European Bank of Reconstruction and Development (EBRD) and the European Commission, signed on 15 December 2006,

–   having regard to the EU-Russia Industrialists' Round Table endorsed at the EU-Russia Summit in July 1997,

–   having regard to the EU-Russia Energy Dialogue instituted at the 6th EU-Russia Summit, held in Paris on 30 October 2000,

–   having regard to the EU-Russia Summit, held on 18 May 2007 in Samara, Russia,

–   having regard to its resolution of 16 November 2006 on a Baltic Sea Strategy for the Northern Dimension(5),

–   having regard to its resolution of 23 March 2006 on security of energy supply in the European Union(6),

–   having regard to Rule 45 of its Rules of Procedure,

–   having regard to the report of the Committee on International Trade and the opinions of the Committee on Foreign Affairs and the Committee on Economic and Monetary Affairs (A6-0206/2007),

A. whereas the Russian Federation is a Member of the Council of Europe and thus has committed itself to the objectives of the Council, which are, in particular, to promote democracy and respect for human rights, and to consolidate democratic stability in Europe by backing political, legal and constitutional reform at national, regional and local levels,

B.  whereas the underlying principles governing economic and trade relations between the EU and the Russian Federation should be reciprocity, sustainability, transparency, predictability, reliability, non-discrimination and good governance,

C. whereas Russia has signed, but not yet ratified, the Energy Charter Treaty which provides a comprehensive international legal framework in the fields of trade, investment protection, transit, energy efficiency and conflict resolution in the energy sector,

D. whereas, within the European Union, the Member States must develop a uniform and coherent joint position on EU economic and trade relations with Russia in view of the commencement of negotiations on a new Partnership and Cooperation agreement,

E.  whereas EU-Russia relations have enormous economic potential and both parties would benefit from increased economic integration and good neighbourly relations; whereas cooperation between the EU and Russia is crucial to ensuring stability in all areas of mutual and overlapping interest,

F.  whereas total trade between the EU and Russia amounted to more than EUR 166 billion in 2005, with Russia's trade surplus representing about 8% of its GDP, i.e. approximately EUR 50 billion; whereas Russia is the EU's third most important trading partner, accounting for 7.3% of the EU's trade, and the EU is Russia's most important trading partner with a 52.9% share of Russia's trade,

G. whereas total Foreign Direct Investment (FDI) in Russia in 2006 is estimated at USD 31 billion compared to USD 14.6 billion in 2005; whereas the EU's FDI in Russia has more than doubled from EUR 2,5 billion in 2002 to EUR 6,4 billion in 2004, making it the most important foreign investor in Russia,

H. whereas foreign firms in specific areas such as wholesale and retail trade, which in 2005 accounted for 38.2% of total FDI in Russia, have seen a growth in revenue generated by the boom in domestic consumption in Russia,

I.   whereas the 1990s were marked by hyperinflation and a 75% devaluation of the rouble in August 1998, which nearly bankrupted the Russian Federation,

J.   whereas, since February 2005, the Russian monetary authorities have pegged the rouble to a basket of currencies in which the euro has a growing share (40% in mid-2006, likely to become 52% by the end of 2007) and currently have more than 100 billion of reserves in euro,

K. whereas Russia’s economic recovery has enabled it not only to pay all its debts to the International Monetary Fund (IMF) and the Paris Club, but also to establish a reserve fund which has accumulated over USD 100 billion since 2004,

L.  whereas foreign investment in the field of energy has fallen from 85% of total investment in 1996 to a mere 60% of total investment,

M. whereas energy production and transit, in the Black Sea Region, are of strategic importance as regards the supply of energy to the EU, and whereas energy is a field in which there is significant cooperation within the Organisation of the Black Sea Economic Cooperation (BSEC), of which Russia is a founding member,

N. whereas the EU imports, on average, approximately 28% of the energy it needs from the Russian Federation, with some countries importing up to 100% of their gas from Russia, and whereas energy-related trade makes up about 65% of EU imports from Russia,

O. whereas the European Union is the strongest filing region for Intellectual Property Rights (IPRs) in Russia with 37% of patent applications and 41% of trademarks,

P.  whereas the Russian Federation, having already concluded a WTO bilateral Market Access Agreement with the United States, signed on 19 November 2006, has yet to conclude final agreements with Vietnam, Cambodia and Georgia and bring multilateral negotiations to a close in order to meet all the necessary preconditions of WTO accession,

Q. whereas the Russian Federation must complete the multilateral WTO accession negotiations,

R.  whereas the agreement between the EC and Russia on the modernisation of the existing system of utilisation of the Transsiberian routes has solved the issue of Siberian overflight payments, as requested by the Russian Federation from EU carriers, for flights over Russian territory; whereas the agreement will strengthen cooperation in the field of transport within the framework of the EU-Russia CES,

General remarks

1.  Recalls the common membership of Russia and the EU Member States in the Council of Europe; supports the development of political pluralism in Russia and considers that the human rights situation in Russia should be an integral part of the EU-Russia political agenda;

2.  Underlines that EU-Russia relations are at a critical stage; therefore, calls for constructive and results-oriented engagement between both Russia and EU, but not at any cost; points out that the European Union shares with Russia not only economic and trade interests and a commitment to democracy, human rights and the rule of law, but also an objective to act in the international arena and in the common neighbourhood; regrets, however, that the EU and Russia have not succeeded in overcoming the lack of trust between them;

3.  Considers that the common membership of Russia and the EU Member States of the Council of Europe underpins their shared values and commitment to its aims, as laid down in its statute and conventions: to extend and protect human rights, promote democracy and uphold the rule of law in the whole of Europe; encourages both the Member States and Russia to actively participate in the Council of Europe as it is a platform for the practical realisation of those aims; notes the high number of cases brought against Russia before the European Court of Human Rights; emphasises the latter’s role in enforcing the obligations of Council of Europe Member States;

4.  Notes that the Russian Federation has created a generally positive macroeconomic environment which has contributed to impressive economic growth following the crisis in 1998; recalls that this growth has been mainly determined by the high rise in world energy prices;

5.  Acknowledges the economic and other related political reforms, namely in the tax system, the system of fiscal federalism, public administration and regulation of the financial system that have been implemented in Russia during recent years; is nonetheless convinced that further structural reforms, namely in health care, education, the gas sector, the banking system and more generally in the area of the enforcement of the rule of law, are necessary and calls on the Russian Federation to pursue its reforms, which will be beneficial both to Russians and to Europeans alike and will make it possible to enhance the Russian Federation's attractiveness in the eyes of international and ,in particular, European investors, thus having a considerable impact on economic growth while at the same time allowing the Russian Federation to benefit from foreign know-how; stresses that any further legislative reform must be carried out in accordance with international standards;

6.  Is of the opinion that efficient and extensive economic cooperation between Russia and the EU should be based on free-market principles, and calls on Russia to continue with market reforms, to refrain from politicising the economy and to respect the independence of public and private institutions;

7.  Reiterates the importance of the sound and effective application of laws and rules; is concerned about the lack of predictability in the application of rules by authorities, including the courts, and the failure to enforce rulings; calls on the Russian authorities to take all the necessary measures to remedy this situation;

8. Calls on Russia to combat corruption more actively, and to focus particularly on combating the underlying causes of this phenomenon;

9.  Is convinced that, where appropriate, harmonised and compatible standards, regulations and conformity assessment procedures should be developed;

10. Encourages the Russian Federation to ensure that the International Labour Organisation's conventions are complied with and to take all the measures necessary to combat social dumping effectively; encourages the Russian Federation to do the same as regards compliance with the Kyoto Protocol in order to combat all kinds of environmental dumping;

11. Welcomes the agreement signed in Sochi, during the EU-Russia summit, on 25 May 2006, simplifying the procurement of visas for Russian and EU nationals and increasing the flexibility of the multiple entry procedures for certain professionals, such as businesspeople, thus helping to facilitate contacts and improve commercial relations;

12. Stresses that increased economic contacts will necessitate more ambitious visa facilitation also covering ordinary bona fide travellers not belonging to any pre-set categories, and liberalisation in the long term;

Regulatory framework - framework for cooperation

13. Emphasises the importance, also to the EU, of Russia's accession to the WTO and its implications for trade liberalisation as well as for its commitment to adhere to its rules, and is convinced that WTO membership will send an important signal to foreign and Russian investors, drive economic growth in Russia and enhance trade exchanges with the EU; urges the Russian Federation to not only work towards concluding the outstanding WTO bilateral Market Access Agreements, but also to fulfil and implement its commitments pursuant to the agreements it has already signed, such as the agreement with the EC;

14. Calls on the Russian Federation, in the context of its forthcoming accession to the WTO, to resolve the problems of tariffs on timber exports to the Scandinavian countries and also to settle the issues relating to rail fares fixed according to destination, particularly those to the Baltic countries, which have been ruled to be discriminatory;

15. Believes that WTO accession should lead to deeper economic integration between the EU and Russia, within the framework of the CES; calls on the Commission to consider the negotiation of a possible Free Trade Agreement (FTA) following Russia's accession to the WTO;

16. Stresses the need for constructive dialogue between the EU and Russia and reiterates the importance of setting up the CES and further developing the objectives agreed upon in the Road Map for the CES, especially as regards the creation of an open and integrated market between the EU and Russia;

17. Believes that progress on implementing the Road Map should continue alongside negotiations on the new PCA; urges the Commission and the Member States to concentrate their efforts on starting negotiations on the new PCA; requests that it be promptly and formally informed of any progress made in this regard;

18. Believes that the EU should, if the negotiations with Russia on a new PCA fail to produce tangible results, consider an alternative approach based on reinvigorating the ongoing work on the agreed roadmaps in the four common spaces, and on elaborating a joint approach for political cooperation;

19. Emphasises that progress in the common space of freedom, security and justice, the space of co-operation in the field of external security and the space of research and education, including cultural aspects, would have a significant economic impact; stresses the need for the Russian government to increase its efforts in that field;

20. Stresses the need for the Russian Federation to perfect its policy as regards the protection of foreign investment in accordance with internationally recognised OECD standards, which would permit the European Union to conduct negotiations on the conclusion of agreements on the protection and promotion of investment;

Trade, market access and investment

21. Stresses the importance of improving the investment climate in Russia; believes that this can only be achieved by promoting and facilitating non-discriminatory, transparent and predictable business conditions rooted in strong democratic values; in addition, stresses that debureaucratisation and the promotion of two-way investments are needed;

22. Takes note of the bill recently introduced in the Russian Federation, which allows the government to reject foreign bids for majority stakes in Russian companies, thus prohibiting foreign ownership of more than 49% in companies active in 39 strategic industries; questions the bill itself as well as the choice and the growing number of industries that have been classified as strategic and essential to national security; considers that this does not represent a move towards improving the investment climate and that this raises fundamental questions regarding the role of the State in a market economy and competition in key sectors of the economy; considers that the ownership situation of companies, in Russia as in other countries, is a matter which can best be determined by the market;

23. Stresses that the establishment and operation of companies should be facilitated on a reciprocal basis; notes that the EU is open to investment from Russia, as is indicated by the rise in Russian businesses present in the EU, notably in the energy and steel sectors; calls, therefore, for foreign companies operating in the natural resource sectors in Russia to be granted the same degree of access;

24. Notes that, in Russia, state trading continues to be successful in certain areas of the economy;

25. Takes note of the introduction of so-called Special Economic Zones, which offer special incentives for investment, a development which could prove advantageous for European businesses; encourages the Russian Federation to guarantee decent working conditions and respect for the trade union rights of workers in these zones; calls for strict observance and independent monitoring of human rights, and social and environmental standards in those Special Economic Zones;

26. Acknowledges the progress that has been made regarding the levying of customs duties; urges the Russian Government to further streamline, standardise and automate its customs procedures and to levy customs duties in a predictable and non-arbitrary manner and without delaying the movement of goods;

27. Stresses that Russia’s accession to the WTO must not result in higher levels of import duties and stronger protectionism compared to the years preceding accession;

28. Notes that the Commission has applied anti-dumping measures in relation to Russian exports of ammonium nitrate, potassium chloride, a number of steel products, silicon and urea products; urges Russian companies to export to the EU under fair trade conditions and to provide Community investigators examining cases of dumping with the necessary information in order to allow EU enforcement authorities to quickly terminate anti-dumping measures that have been applied;

29. Takes note of Russian anti-dumping duties imposed on exports from the EU, especially on steel products; considers that those conflicts should be settled as a matter of priority;

30. Notes, with regret, that Russia is exploiting commercial policy instruments for foreign policy ends in a manner incompatible with WTO rules;

31. Draws attention to the unjustified ban on meat imports from Poland, which has now been in place for two years, and recommends that this problem, the existence of which is incompatible with WTO rules, be resolved as soon as possible;

Intellectual Property Rights

32. Stresses the need for improvements in legislation and law enforcement to be made as regards the protection of intellectual, industrial and commercial property rights, in order to increase competitiveness and make the investment climate more attractive by approximating regulatory systems with the highest international standards and norms; urges the Russian authorities, ahead of its forthcoming membership of the WTO, to align Part IV of its Civil Code on Intellectual Property Rights to WTO rules and international agreements, particularly the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS), and to ensure full implementation, so that counterfeiting and piracy can be effectively combated;

33. Emphasises the need to adapt the current court system in order to effectively protect IPRs and ensure more speedy prosecutions; notes the rise in cases in which European businesses have been successful, but is deeply concerned about the lack of enforcement of rulings;

34. Is deeply concerned about the problem relating specifically to the production and sale of counterfeit products, in particular pharmaceutical products, as this not only undermines legitimate producers, but also presents a danger to public health;

35. Encourages the Russian authorities to take all necessary and effective measures to uncover the sources of illegal activity and to render production plants or internet-based operators inoperable; notes that, as regards production plants, those measures should include repeated and unannounced inspections of known plants with the cooperation of rights holders, and strengthening the licensing regime as regards optical media plants; stresses that, for internet-based operators, those measures should cover the enactment of legislative amendments whichprovide that collecting societies may only act on behalf of rights holders that explicitly authorise such action and the enactment of provisions to implement the Copyright Treaty (WCT) and the Performances and Phonograms Treaty (WPPT) adopted by the World Intellectual Property Organization (WIPO) in 1996;

Energy

36. Reiterates the need for a coherent European energy policy; stresses that bilateral agreements between EU Member States and Russia should, if absolutely necessary, help in the pursuit of the EU’s overall energy security interests;

37. Emphasises, however, that the primary objective of EU energy policy cannot simply be to avoid continued energy dependence on Russia;

38. Urges both the EU and Russia to cooperate more closely with one another and with all the social partners within the framework of the EU-Russia Energy dialogue, with particular emphasis being placed on addressing issues relating to the sustainability and continued reliability of the production, transportation and use of energy, energy efficiency and security of supply; urges the EU, in close cooperation with the Russian Federation, to promote investment in renewables and to encourage the sharing of technology and regulatory convergence with a view to establishing a sustainable relationship benefiting both parties; also calls on the Russian Federation to offer fair and non-discriminatory treatment to all its partners, to facilitate access to the Russian market by European investors and to give due consideration to environmental protection;

39. Supports the German Presidency in its aim to ensure a secure supply of energy and reduce energy dependency by means of cooperation and further dialogue on energy with Russia, thus putting the energy partnership policy on a solid and reliable footing, as well as by aiming to diversify sources of energy by introducing binding targets for energy efficiency and for the use of renewable and alternative energies; notes that the development of such a strategy is of common interest to the EU and Russia and that it is hazardous for the EU to become too dependent on natural gas;

40. Welcomes the ratification of the Kyoto Protocol by the Russian Federation in October 2004; calls on the EU and the Russian Federation to cooperate closely with a view to promoting technical innovation and improving efficiency in the energy sector, and to consider jointly future strategies to achieve reductions in greenhouse gas emissions for the period following the expiry of the Protocol in 2012;

41. Is convinced that the sole means of achieving a formal agreement on energy, ratified by Russia, is to negotiate a new framework document, i.e. in the context of the new PCA; suggests that elements of the European Energy Charter Treaty could be transposed in a new document, as the current situation, characterised by a lack of formal agreement, is unacceptable;

42. Supports programmes to improve the energy infrastructures that connect Russia with EU Member States;

43. Expresses its concern over the nationalistic and monopolistic trends in the management of Russian energy resources; is deeply concerned about the difficulties that foreign and private companies face when investing in future development on Russia's continental shelf; calls on Russia to adopt a more liberal approach and to create a level playing field, enabling foreign companies to compete with Russian firms, in accordance with the WTO rules;

44. Acknowledges that a significant amount of money is being invested in the maintenance of downstream distribution infrastructure and pipelines; emphasises, nonetheless, that, according to experts, a lack of investment, including foreign investment, may lead to a shortage of gas by as early as 2010;

45. Reiterates Parliament's call on the Commission and the Member States to take seriously the danger of a deficit in gas supplies from Russia after 2010 due to a lack of investment in Russia’s energy infrastructure; supports the energy dialogue between the EU and Russia as a platform for addressing the issue of the necessary investment in the Russian and European energy infrastructures, in order to ensure both security of supply and security of demand; emphasises the need to establish effective and timely crisis communication mechanisms between the EU and Russia; emphasises the crucial importance of coherence, close coordination and solidarity between EU Member States in the energy dialogue; stresses the need for the EU to pursue a parallel strategy of enhancing security and diversification of its energy supplies and the importance of EU-Russia cooperation with regard to environmental protection, energy efficiency, energy saving and renewable energy;

46. Calls on Russia not to apply a dual pricing system – which is in any case contrary to WTO rules – with regard to energy sources;

47. Calls on the Russian Federation, in close cooperation with the EU, to invest in the modernisation of its nuclear power plants, particularly in infrastructure, new technology and renewable energy sources, reflecting the pursuit of the common objectives of security, energy efficiency, environmental protection and public health;

48. Reiterates its support for the opening of the EU market to Russian electricity exports, on condition that relevant Russian safety standards, in particular in relation to nuclear power plants and the safe processing and disposal of nuclear waste, are brought up to EU level, so that the risk of environmental dumping is averted;

Transport

49. Takes note of the recommendations made by the High Level Group on the Extension of the Major trans-European Transport Axes to the Neighbouring Countries and Regions; supports, in particular, the development of transport infrastructure between the EU and Russia, i.e. the harmonisation of conditions for railway transport;

50. Welcomes the agreement signed on 24 November 2006 between the EU and the Russian Federation, during the EU-Russia summit in Helsinki, on the situation pertaining to Siberian overflight payments; considers that this agreement will make it possible to normalise and enhance relations in the field of air transport between the EU and the Russian Federation and will significantly improve the competitiveness of European airlines and facilitate their operations aimed at the emergent markets in Asia;

Other specific sectors

51. Considers trade in services as an essential part of future EU-Russia trade relations; calls for EU and Russian laws to be converged, especially in areas such as financial services, telecommunications and transport; and calls for an end to the Baltic States' current discriminatory rail charges on imports and exports;

52. Stresses the importance of ensuring stability in the financial system, supporting the consolidation of a sound financial sector and an effective system for protecting customers of financial services through an improvement of the legislation, effective supervision and the implementation of measures that conform to the highest standards and norms applicable to financial services suppliers;

53. Considers that those reforms will favour an investment climate and can play a major role in enabling continued economic growth in Russia in a way that is less dependent on energy exports and the price of energy;

54. Stresses the importance of competition and openness in the financial services industry; expresses, in this respect, its concern with regard to existing obstacles to the licensing of foreign bank branches;

55. Believes that cooperation in the promotion of regulatory convergence in the agricultural sector, notably with regard to sanitary- and phytosanitary measures, should be intensified; stresses the importance, for many Member States, of exports of agricultural products to Russia, i.e. fish, meat and dairy products; urges the EU to find a common solution to problems with exports to the Russian market, specifically relating to sanitary- and phytosanitary measures;

56. Calls on Russia not to impose restrictive animal or plant health measures on imported products which are discriminatory or based on a higher level of requirements than those applicable to domestic products;

Relations with other trade partners

57. Stresses that the development of the strategic economic partnership between the EU and Russia should take into account Russia's geopolitical position; emphasises the need to integrate the EU's approach to Russia with other efforts in the region, such as the European Neighbourhood Policy (ENP), the Northern Dimension and the Black Sea Strategy;

58. Welcomes the “Black Sea Synergy” initiative in the context of the ENP, which facilitates regional cooperation between the Black Sea region countries concerned, the Russian Federation and the EU in sectors such as energy, transport and the environment, and enhances the dialogue on respect for human rights, democracy and good governance;

59. Also recognises the potentially positive contribution that could be made by reinforcing the wider inter-regional cooperation between the EU and the Organisation of the Black Sea Economic Cooperation (BSEC) in the context of the new ‘Black Sea Synergy’ approach;

60. Emphasises the importance of increasing EU-Russia regional cooperation within the framework of the Northern Dimension, in which the EU and Russia, along with Iceland and Norway, are equal partners; underlines the need to generate concrete partnership projects in order to support and reinforce existing cooperation projects and multilateral partnerships, especially as regards Baltic Sea cooperation, in line with the Baltic Sea Strategy for the Northern Dimension, endorsed by Parliament in its resolution of 16 November 2006(7); stresses the importance of further economic and social development in the Kaliningrad region as a model for enhanced economic and trade cooperation between the EU and Russia;

61. Stresses the benefits that closer EU-Russian relations in the tourism sector would entail, as many regions of the Member States are considered traditional destinations for Russian visitors;

62. Draws attention to the urgent need to solve the problems involved in improving the infrastructure for crossing the border between Latvia and Russia (and also between other EU-Russia border states), making use of the resources of the E U and the Russian Federation in order to open both existing border crossing points and new ones; stresses that it is also important to develop border infrastructure in the transit countries, such as the Ukraine, in order to facilitate and speed up cooperation between EU and Russia;

63. Believes that both partners have a common interest in a stable, secure and democratic neighbourhood, and encourages the development of good neighbourly relations in the field of trade and economic cooperation among the countries of the region; stresses that the joint upholding of human rights and implementation of the ENP offer a number of possibilities for multilateral cooperation, not least through the enhanced Neighbourhood Policy toward the East, in order to foster constructive cooperation in the areas of the environment, energy, infrastructure and trade;

64. Believes that the existence of frozen conflicts in the common neighbourhood represents a significant impediment to economic development in this region, and that supporting their settlement, in line with the principles of international law, including through addressing the economic consequences, should constitute a priority for the purposes of further promoting economic development and prosperity in the countries of the common neighbourhood;

o

o o

65. Instructs its President to forward this resolution to the Council and the Commission, the governments and parliaments of the Member States and the Government and Parliament of the Russian Federation.

(1)

OJ L 327, 28.11.1997, p. 1.

(2)

OJ L 185, 6.7.2006, pp. 17.

(3)

OJ L 119, 9.5.2007, p.32.

(4)

10633/1/06 REV1.

(5)

Texts Adopted, P6_TA(2006)0494.

(6)

Texts Adopted, P6_TA(2006)0110.

(7)

Texts Adopted, P6_TA(2006)0494.


EXPLANATORY STATEMENT

Introduction

The relations between the EU and Russia are at an important juncture.

After a period of economic stagnation during the final years of the Soviet Union and a deep recession during the 1990s, Russia’s economy has experienced strong growth rates since 1999. On average, Russia’s GDP increased by 6.7% per annum between 1999 and 2005; in 2006, Russia's GDP grew by 6.5%.

Energy is at the heart of Russia’s economic performance. Russia controls more than 20% of the world’s known gas reserves and 5% of proven oil reserves. It currently rivals Saudi Arabia as the world’s largest producer and exporter of oil; and it is the indisputable leader in gas production and exports. Russia has benefited tremendously from soaring prices of those commodities on the world market. In 2005, oil and gas accounted for 63% of Russian exports and represented 37% of state budget revenues.

Due to its new economic strength, Russia has gained self-confidence and developed a strong sense of independence. As a consequence, it has become increasingly sensitive to outside criticism of its domestic politics. At the same time, some observers have noted that the speed of Russian reform efforts has been slowing down of late. Moreover, the government is increasingly interfering in the Russian economy.

What is more, although Russia has enjoyed the reputation of a reliable supplier of oil and gas for decades, this image has been tainted over the last months. At the beginning of 2006, Russia briefly cut the gas supply to Ukraine, in a dispute over prices, which also affected some EU member states. In November 2006, rumour spread that Russia may be seeking to create a global gas cartel including Algeria, Qatar, Libya, the countries of Central Asia, and perhaps Iran, to strengthen its leverage in political dealings with the EU. In January 2007, Russia’s conflict with Belarus over oil pricing and transit fees has led to a temporary disruption of Russian oil supply to some EU member states.

Finding a common response to this new situation has proven difficult for the EU member states, all the more since Russia has started to engage a number of EU member states on the bilateral level.

In December 2007, the Partnership and Cooperation Agreement (PCA) is coming to an end of its initial 10-year period, and Russia’s WTO accession is coming closer. This affords a unique opportunity to provide new foundations for EU-Russia relations and forge closer ties between the two economies to their mutual benefit.

Economic Interdependence

Despite the complex overall relations between the EU and Russia, the general conditions for strengthening economic ties between Russia and the EU are favourable. There is no doubt that the EU and Russia need each other. Trade between Russia and the EU has grown by more than 70% over the last five years. In 2005 it amounted to more than €163 billion. The economic structures of the EU and Russia are highly complementary.

Energy

The EU is easily Russia’s most important trading partner, accounting for 52.9% of its exports and imports. The EU is the most important destination of Russia’s oil and gas exports. 63% of Russia’s oil exports and 62% of Russia’s natural gas exports go to the EU. Since Russia's economic well-being depends to a large extent on its energy exports, it has a strong interest in stable relations with the EU. Likewise, the EU needs to maintain good relations with Russia, since it is highly dependent on energy imports, and Russia is the EU’s single biggest oil and gas supplier. 30% of the EU’s oil imports (representing 27% of total EU oil consumption) and 50% of its gas imports (representing 25% of gas consumption) come from Russia. The EU's dependence on energy imports is estimated to grow to about 70% by 2030, and Russia's share is expected to remain high.

Foreign Investment

What is more, Russia needs to attract more Foreign Direct Investment (FDI) to maintain and increase production growth rates across its energy sector. Russia has already taken some measures to improve its attractiveness to foreign investors by changing general FDI legislation, streamlining its tax administration, adopting the OECD’s Principles of Corporate Governance, reforming land law, its customs code and foreign exchange regulation, and removing exchange controls on the rouble. This has contributed to a considerable acceleration of FDI flows over the past years, despite a small dent in 2005. In 2006, they amounted to an estimated €22.5 billion. The EU is the most important source of FDI inflows to Russia. It accounts for about 70% of all accumulated foreign investment in Russia. The EU's Direct Investment in Russia has more than doubled between 2002 (€2.5 billion) and 2004 (€6.4 billion). Nevertheless, Russia still attracts relatively little FDI compared to other emerging economies relative to the size of its economy and level of development. Moreover, much of the investment inflows recorded so far probably stem from Russian-owned assets held offshore and reinvested in Russia, rather than from foreign investors bringing fresh capital into the Russian economy. Yet Russia needs large sums foreign investment to develop its energy sector. Oil output growth in Russia has dropped sharply in 2004 and 2005; and Russia's gas output has also been stagnating. To maintain and increase production growth rates across the Russian energy sector -- and in order to ensure that it continues to boost the Russian economy -- new fields need to be discovered, developed, and supplied with new technology and infrastructure. The EU can offer capital and new technology – including renewable – for energy production, consumption, and efficiency (Russia consumes 3-4 times more energy per unit of GDP than other countries of similar climate). But EU companies are hesitant to make the necessary investments, due to a perception of increasing state interference in the energy sector, high levels of corruption in public administration, an opaque and inefficient judicial system, and weak property rights.

Moreover, as indicated by the recent boom in domestic consumption, Russia is a large market for EU goods and services, with considerable potential for growth.

For these reasons, it is in the mutual interest of both Russia and the EU to deepen their economic relationship.

Russia’s Accession to the WTO

Russia's WTO accession is an important step in this direction. The respective negotiations have now reached their final stage. Bilateral Market Access Agreements were concluded with the EU on 21 March 2004 and with the U.S. on 19 November 2006. Russia still needs to confirm its previous agreement with Georgia and reach agreements with Cambodia, Vietnam, and possibly Saudi Arabia. Although the overall impact of WTO accession on Russia will depend on the terms and conditions of accession that Russia and its trading partners in the WTO finally agree on, Russia will likely have to reduce tariffs and other protective measures for import-sensitive industries such as autos and aircraft and will have to open up key financial service industries – banking and insurance – to foreign competition. This opens up opportunities for EU businesses. In Russia, such adjustments could lead to the loss of jobs in those areas and the need for the Russian government to provide unemployment insurance and other adjustment assistance in the short run. In the long run, however, economic theory and the record of economies that have gone through similar transitions suggest that trade liberalization will lead to a more efficient Russian economy and to raising the living standards of the average Russian citizen. Moreover, by joining the WTO, Russia would reassure potential investors, at home and abroad, that it is determined to integrate into the global economy on the basis of a stable, predictable framework. Thus it will make Russia a safer place to invest in, for Russian and EU companies alike. At the same time, the WTO provides a multilateral forum for Russia to settle trade disputes with other WTO members. As a WTO member, Russia will have a voice in how those rules are made and implemented. For these reasons, the EU should push for the conclusion of the outstanding agreements.

Developing the Regulatory Framework

The EU and Russia should also focus on the implementation of the Road Maps of the Four Common Spaces and start negotiations on a new Partnership and Cooperation Agreement as soon as possible. Energy relations should be placed at the core of a new PCA with Russia. Although Russia refuses to ratify the Energy Charter Treaty, President Vladimir Putin has indicated on the Lahti Summit in October 2006 that Russia does not reject its principles. Thus, another document should be drawn up taking on board these principles while amending certain articles. This document should then form part of the PCA negotiations. In general, the new PCA should strengthen the rule of law on energy issues by creating a level playing field of rules to be observed by all participating governments, thus minimizing the risks associated with trade and investment.

Free Trade Agreement

Moreover, with a view of taking economic relations forward once Russia has joined the WTO, the EU and Russia should also continue the exploratory talks on a possible Free Trade Agreement (FTA), which have been initiated at the EU-Russia Summit in Sochi in May 2006. A deep and comprehensive FTA would promote the diversification of trade and investment relations between the EU and Russia, which currently are too narrowly focused on the energy sector. At the same time, the FTA would provide an opportunity to establish a stronger EU-Russian partnership in energy trade and investment based on mutual interest.

18.4.2007                                                                                    


OPINION of the Committee on Foreign Affairs

for the Committee on International Trade

on EU economic and trade relations with Russia

(2006/2237(INI))

Draftsperson: Jan Marinus Wiersma

SUGGESTIONS

The Committee on Foreign Affairs calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.      Underlines that EU-Russia relations are at a critical stage; therefore, calls for constructive and results-oriented engagement between both Russia and EU, but not at any cost; points out that the Union shares with Russia not only economic and trade interests and a commitment to democracy, human rights and the rule of law but also an objective to act in the international arena and in the common neighbourhood; regrets, however, that the EU and Russia have not succeeded in overcoming the lack of trust between them;

2.      Believes that constructive engagement means a genuine and mutual commitment to resolving contentious issues and seeking convergence of economic interests, security in the common neighbourhood and democracy, whilst adhering to the principles of the Council of Europe that both the Member States and Russia have signed up to; considers that the common membership of Russia and the EU Member States of the Council of Europe underpins their shared values and commitment to its aims as laid down in its statute and conventions: to extend and protect human rights, promote democracy and uphold the rule of law in the whole of Europe; encourages both the Member States and Russia to participate actively in the Council of Europe as one of the platforms for the practical realisation of those aims; notes the high number of cases brought against Russia before the European Court of Human Rights; emphasises the latter’s role in enforcing the obligations of Council of Europe Member States;

3.      Supports the continuation and enhancement of the EU's human rights consultations with Russia and calls for the involvement of the European Parliament as well as European and Russian NGOs in this process; considers that the human rights situation in Russia, in particular as regards freedom of speech and the independence of the media, the legislation on NGO activity and the treatment of human rights defenders, racism and xenophobia, should be an integral part of the EU-Russia political agenda;

4.      Emphasises, therefore, that a comprehensive EU-Russia strategic partnership, to be based on a new EU-Russia agreement, should promote common values, democratic governance, the rule of law and good neighbourly policies, reciprocity of market access and respect for market rules; expects that stronger economic relations, based on reciprocity and aimed at deepening mutual trust, will go hand in hand with the necessary political conditions for cooperation in other fields of common concern and reduce the likelihood that either partner mixes economic concerns with political motivations; repeatedly stresses, therefore, that the EU's common policy towards, and Member States' bilateral relations with, Russia should be guided by jointly agreed principles;

5.      Underlines the importance of concluding the WTO–Russia negotiations; expresses its appreciation regarding the bilateral EU–Russia agreement that has been concluded, but stresses the need to carefully follow the jointly agreed framework; emphasises in this respect that discriminatory trade policies, such as double tariffs, are not in line with the principles on which EU-Russia trade relations are based; expresses concern that European investments in Russia do not enjoy the same level of legal protection and market access as is afforded to Russian investors in the EU, not least in the so-called strategic sectors of the Russian economy;

6.      Is worried about social and political polarisation and the restriction of the democratic space in the run-up to the Duma elections in December 2007 and the presidential elections in March 2008; calls on the Russian authorities to ensure the Russian people's right to free elections by creating the necessary conditions for a free and fair electoral process, to ensure that the opposition parties have the opportunity to campaign, and to abide by the principle of freedom of expression; supports the development of political pluralism in Russia; stresses that freedom of the media will be of key importance if the elections are to be seen as free and fair;

7.      Is concerned that the practice of holding politicised trials, as in the cases of Mikhail Khodorkovsky and Platon Lebedev, can reduce confidence in the rule of law, distort the market economy in Russia and impede its economic relations with the EU;

8.      Emphasises the importance of increasing EU-Russia regional cooperation within the framework of the Northern Dimension, in which the EU and Russia, along with Iceland and Norway, are equal partners; underlines the need to generate concrete partnership projects to support and reinforce existing cooperation projects and multilateral partnerships, especially as regards Baltic Sea cooperation, in line with the Baltic Sea Strategy for the Northern Dimension endorsed by Parliament in its resolution of 16 November 2006(1); stresses the importance of further economic and social development in the Kaliningrad region as a model for enhanced economic and trade cooperation between the EU and Russia;

9.      Believes that both partners have a common interest in a stable, secure and democratic neighbourhood, and encourages the development of good neighbourly relations in the field of trade and economic cooperation among the countries of the region; stresses that commonly implemented human rights and the European Neighbourhood Policy offer a number of possibilities for multilateral cooperation, not least through the enhanced Neighbourhood Policy toward the East, in order to foster constructive cooperation in the areas of the environment, energy, infrastructure and trade;

10.    Believes that the existence of frozen conflicts in the common neighbourhood is an important impediment to economic development in this region, and that supporting their settlement in line with the principles of international law, including through addressing the economic consequences, should constitute a priority for the purposes of further promoting economic development and prosperity in the countries of the common neighbourhood;

11.    Expresses its concern about the lack of progress made by the EU in formulating a mandate for the negotiations on a new Partnership and Cooperation Agreement; calls on the EU and Russia to resolve the underlying trade disputes, enabling the EU and Russia to move forward; stresses that an agreed common position of all Member States is a prerequisite for effective negotiations with Russia and that it is essential to avoid bilateral agreements which undermine a genuine EU common strategy; calls on Russia to remove the trade obstacles which have resulted in certain EU Member States being unable to adopt that mandate;

12.    Encourages further development of customs and trade procedures so as to permit accelerated movement of goods between the EU and Russia; recognises that this can be achieved through electronic exchanges of information between the customs services accompanied by modern risk management practices which respect the need to protect commercial and other data and business confidentiality; believes that this will help the countries concerned to benefit from increased economic activity and security; points out that pilot projects should be established in order to facilitate this process and engage Russia, the EU and the Member States;

13.    Considers that the Council, the Commission and the Member States should not enhance trade relations with Russia at the expense of the countries bordering Russia, in order to avoid situations in which the Moscow authorities use trade relations with the EU as a pretext for punishing, or as an alternative to trading with the traditional markets of, countries with which political strains have arisen, as in the case of the ban on imports of agricultural products from Poland and wine from Moldova and Georgia;

14.    While welcoming the ambitious energy package proposed by the Commission as a step forward, recalls that, at least in the medium term, European economies will remain dependent on energy imports, which carries with it the threat of suppliers engaging in energy blackmail; underlines the need to anchor relations with Russia as a major energy supplier in a transparent, mutually beneficial strategic framework, based on reciprocity and non-discrimination in respect of market access and mutual respect of market rules; regards interdependence in the areas of production, transport and distribution as the main aim of an equitable, secure and transparent energy relationship; is concerned about recent cases of gas supply cuts to several neighbouring countries and stresses that a strategic energy partnership between the EU and Russia should prevent the use of energy exports and state controlled companies operating in the energy field as instruments of foreign policy; stresses that the principles of the Energy Charter and the G8 conclusions should be incorporated in a new agreement between the EU and Russia, as agreed by the informal European Council meeting in Lahti in 2006; at the same time, stresses the importance of the ratification of the Energy Charter by Russia without delay; stresses the need for loyal cooperation among EU Member States when adopting and conducting energy projects involving Russia;

15     Reiterates Parliament's call on the Commission and the Member States to take seriously the danger of a deficit in gas supplies from Russia after 2010 due to a lack of investment in Russia’s energy infrastructure; supports the energy dialogue between the EU and Russia as a platform for addressing the issue of the necessary investment in the Russian and European energy infrastructures, in order to ensure both security of supply and security of demand; underlines the need to establish effective and timely crisis communication mechanisms between the EU and Russia; emphasises the crucial importance of coherence, close coordination and solidarity between EU Member States in the energy dialogue; underlines the need for the EU to pursue a parallel strategy of enhancing security and diversification of its energy supplies and the importance of EU-Russia cooperation with regard to environmental protection, energy efficiency, energy saving and renewable energy;

16.    Calls on the authorities of the Russian Federation to implement all necessary measures to guarantee energy supplies to the EU and in particular to renew supplies of crude oil to the Mažeikių oil refinery in Lithuania, which were cut off on 3 August 2006;

17.    Notes that Russia's economic growth is to a considerable extent based on resource exports; notes that economic and political stability are inextricably linked; considers that strengthened EU-Russia economic cooperation will contribute to balanced and diversified economic development in Russia; is seriously concerned, however, by the tendency of the Russian government to increase its shares in companies of strategic importance;

18.    Stresses the need to use all forms of contact with the Russian Federation to encourage the Russian authorities to ensure genuine protection for human rights, with particular reference to freedom of movement, free elections, freedom of expression and respect for the rights of national minorities, especially the rights of Georgians and Chechens, which at present are constantly violated;

19.    Welcomes the recent visa facilitation agreement between the EU and Russia, but stresses that increased economic contacts will necessitate more ambitious visa facilitation also covering ordinary bona fide travellers not belonging to any pre-set categories, and liberalisation in the long term;

20.    Recalls that the EU and Russia should work together towards arriving at multilateral solutions to global issues; welcomes the constructive approach taken by Russia in the six-nation talks with North Korea; calls on Russia to show a similar constructive attitude to finding a sustainable solution regarding the final status of Kosovo, in accordance with the position of the United Nations); condemns Russian military sales to Iran and Russia's unwillingness to stop supplying Iran with Russian arms and military know-how.

PROCEDURE

Title

EU economic and trade relations with Russia

Procedure number

2006/2237(INI)

Committee responsible

INTA

Opinion by
  Date announced in plenary

AFET
28.9.2006

Enhanced cooperation – date announced in plenary

 

Drafts(wo)man
  Date appointed

J.M. Wiersma

17.10.2006

Previous drafts(wo)man

 

Discussed in committee

22.3.2007

12.4.2007

 

 

 

 

Date adopted

12.4.2007

Result of final vote

+:

–:

0:

25

0

1

Members present for the final vote

Christopher Beazley, Panagiotis Beglitis, Michael Gahler, Ana Maria Gomes, Alfred Gomolka, Richard Howitt, Bogdan Klich, Eugen Mihăescu, Francisco José Millán Mon, Cem Özdemir, Tobias Pflüger, Bernd Posselt, Jacek Saryusz-Wolski, Gitte Seeberg, Marek Siwiec, Antonio Tajani, Jan Marinus Wiersma, Konrad Szymanski

Substitute(s) present for the final vote

Laima Liucija Andrikienė, Alexandra Dobolyi, Árpád Duka-Zólyomi, Glyn Ford, Tunne Kelam, Aloyzas Sakalas

Substitute(s) under Rule 178(2) present for the final vote

Wieslaw Stefan Kuc, Marcin Libicki

Comments (available in one language only)

 

(1)

Texts Adopted, P6_TA(2006)0494.


OPINION of the Committee on Economic and Monetary Affairs (13.4.2007                                                                                               )

for the Committee on International Trade

on economic and trade relations between the EU and Russia

(2006/2237(INI))

Draftsman: Robert Goebbels

SUGGESTIONS

The Committee on Economic and Monetary Affairs calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

A.  whereas the implosion of the USSR, the achievement of independence by many former republics of the Soviet empire and the dismantling of the former Communist bloc have utterly transformed the political geography of Europe and Asia and, to quote Umberto Eco, 'it will take decades for the collapse of the Soviet system to be completed',

B.   whereas the Russian Federation, which replaced the Russian Soviet Federated Socialist Republic in December 1991, is still, at 17 million km², the largest state in the world; whereas just over 80% of its 150 million inhabitants are ethnic Russians; whereas almost 30 million Russian citizens belong to a multiplicity of different ethnic groups, a situation which sometimes causes bloody conflict, as in Chechnya,

C.  whereas the Russian Federation's domestic political problems have been compounded by major economic and social problems arising from the necessary, but ill-managed, liberalisation of a planned and ossified economy,

D.  whereas the privatisation policy pursued during the years when President Yeltsin was in office resulted, all too often, in national assets being carved up for the benefit of a few thousand oligarchs and kleptocrats,

E.   whereas the 1990s were marked by hyperinflation and a 75% devaluation of the rouble in August 1998, which nearly bankrupted the Federation,

F.   whereas, since President Vladimir Putin's election and subsequent re-election, and given the surge in energy prices, the economic situation has substantially recovered and, between 1999 and 2005, Russia's GDP achieved an average annual growth rate of 6.7%,

G.  whereas the Russian Federation is the E U's geographical neighbour and is, and will continue to be, an important partner for the Union, and whereas the two entities consequently have certain shared responsibilities and opportunities which should lead to increasingly close economic cooperation and mutually beneficial partnership,

H.  whereas both Russia and the E U would find it difficult to dispense with various kinds of trade and exchanges and it is in the interest of both partners to establish a balanced framework for cooperation in order to ensure the harmonious development of trade between them,

I.   whereas, in 2005, Russia’s share of the E U’s overall trade was €263 billion, or 7.3%, making Russia the EU’s third partner after the United States and China, though before Japan,

J.   whereas Russia’s economic recovery has enabled it not only to pay all its debts to the IMF and the Paris Club, but also to establish a reserve fund which has accumulated over 100 billion dollars since 2004,

K. whereas, at the same time, Russia has increased its imports from the EU and the EU accounts for some 52% of the value of Russia’s external trade,

L.  whereas, since February 2005, the Russian monetary authorities have pegged the rouble to a basket of currencies in which the euro has a growing share (40% in mid-2006, likely to become 52% by the end of 2007) and currently have more than 100 billion of reserves in euro,

M. whereas Russia holds 6.1% of known world crude oil reserves and 26.7% of natural gas reserves; whereas it supplies over 25% of the EU’s gas and oil consumption and, despite the growing use of alternative energies, European demand for fossil fuels will continue to increase, if gradually, over the next twenty years; whereas the level of dependency on Russian resources is even higher in the new Member States, as 60% to 100% of their energy demands are met by Russia; moreover these countries rely, to a large extent, on Russia for the supply of nuclear fuel,

N.  whereas the E U aims to accelerate its transition to a low-carbon economy through increased use of renewable energies, while promoting more economical and cleaner ways of using hydrocarbons and carbon; whereas, in accordance with the subsidiarity principle, some Member States will have recourse to third- or fourth-generation nuclear reactors,

O. whereas the EU’s energy efficiency is ten times greater than Russia’s (145.9 tonnes of oil equivalent [TOE] per million dollars of GDP in the EU against 1 316.5 TOE per million dollars of GDP in Russia); whereas CO2 emissions per inhabitant were 8.4 tonnes/year in the EU and 10.4 tonnes/year in Russia,

P.   whereas intelligent self-interest requires the E U to help Russia transform its energy sector in pursuit of the same energy-saving and energy-efficiency objectives and replace nuclear facilities of the 'Chernobyl' type with safer reactors,

Q.  whereas a recent study by the Russian Federation's Ministry for Energy concluded that Russia's domestic primary energy demand will increase by around 25% by 2020, but that final energy demand could be reduced by 40 to 45% by economic restructuring of the energy sector using the best available technology in terms of energy efficiency and energy saving,

R.   whereas the European Union's sustainable development strategy requires it to help the countries which supply it with energy, and in particular Russia, to reform their energy market by means of price mechanisms which encourage the saving of energy , the use of the most efficient technology possible and the use of those technologies which are the most environmentally sound and emit the smallest quantity of greenhouse gases,

S.   whereas it is to be seen as an improvement that Russia- a great polluter- has signed the Kyoto Protocol, and a positive development that, in 2004, the EU closed the bilateral negotiations on WTO membership with Russia; it is nevertheless of concern that it has failed to apply competition rules, for instance, by permitting the existence of dual energy prices and the infringement of intellectual property rights (IPRs),

T.   whereas Russia has signed, but not yet ratified, the Energy Charter Treaty, which provides a comprehensive international legal framework on issues such as trade, investor protection, transit, energy efficiency and dispute resolution in the energy sector,

U.  whereas the Transit Protocol to the Energy Charter Treaty is aimed at strengthening mutually beneficial legal principles covering transit flows of energy resources,

V. whereas the supply of Russian gas could suffer because of a lack of investment in the reparation of existing infrastructures and the construction of new interconnections; whereas creating a regime of investment based on international law would be in both Russia's and the EU's economic interest;

Cooperation with Russia and solidarity among EU members

1.   Acknowledges the importance of Russia as a trading partner- a role that is being strengthened by virtue of EU enlargement - and emphasises the importance of trade relations becoming stronger in the future; notes that the EU and Russia have an interdependent relationship and both parties would benefit from a well-functioning partnership;

2.   Advocates more extensive cooperation between Russia and the EU in all economic fields, based on the principles of mutual benefit, non-discrimination, transparency and reciprocity in terms of market access and investment climate; believes that those principles should be properly reflected in the mandate for a new EU-Russia Partnership and Cooperation Agreement;

3.   Takes the view that solidarity amongst Member States in the field of policies pursued with Russia should be reinforced in view of the situation in which the more vulnerable new Member States find themselves, on the one hand, and in view of increased Russian investments in strategic sectors of these new Member States on the other; considers that such solidarity must take account of the interests of the countries situated near Russia, with regard to their oil and gas consumption and the location of pipelines, the export of agrarian products, and the different aspects of environmental protection,

4.   Stresses that an agreed common position on the part of all Member States is a necessary prerequisite for effective negotiation with Russia, and that bilateral contacts should not undermine the common EU strategy vis-à-vis Russia,

Energy

5.   Emphasises the need to further develop and implement a common energy strategy for Europe, incorporating procedures, distributors and consumers, aimed at creating a transparent and sustainable energy system, and to enhance the regional diversity of energy supplies; notes that the development of such a strategy is of common interest to the EU and Russia and that it is hazardous for the EU to become too dependent on natural gas; emphasises that the EU should continue using other sources of energy with nuclear power being one such source,

6.   Reiterates its support for the opening of the EU market to Russian electricity exports, on condition that relevant Russian safety standards, in particular in relation to nuclear power plants and the safe processing and disposal of nuclear waste, are brought up to EU level, so that the risk of environmental dumping is avoided,

7.  Observes that reducing the share of nuclear power in the EU's energy mix directly increases the EU's dependance on external suppliers, notably Russia for gas;

8.   Takes the view that it is necessary for Russia to ratify the Energy Charter and the Transit Protocol to the Energy Charter ; believes that, failing that it would, at the very least, be desirable to conclude a strategic partnership agreement with Russia in that area;

Business climate

9.   Is of the opinion that efficient and extensive economic cooperation between Russia and the EU should be based on free-market principles, and calls on Russia to continue with market reforms, to refrain from politicising the economy and to respect the independence of public and private institutions,

10. Takes the view that Russia should ensure, in the spirit of reciprocity, that businesses can operate within a climate of free and open competition, and in the absence of state intervention; underlines that Russian companies must be subject to EU competition legislation under the same conditions as other international operators active on the internal market of the EU,

11. Urges the Commission to negotiate with Russia a regional free-trade agreement in compliance with WTO rules,

12. Notes that the business climate in Russia is currently insecure given the failures of the judicial system, but also notes that WTO membership will send an important signal to foreign investors, thereby helping to strengthen and diversify trade links,

13. Calls on the Commission to continue and strengthen dialogue with the Russian authorities and with economic partners on issues of trade and economic co-operation, covering in particular technical regulation and standardisation of customs procedures, the liberalisation of services, the abolition of monopolies , the openingup of the banking system and mutual guarantees for direct and portfolio investment, and to ensure that Russia puts in place intellectual property enforcement measures resulting in a substantial reduction in IPR piracy prior to Russia's accession to the WTO,

Currency

14. Considers that it is now appropriate, in view of Russia's current economic position, to move from a currency based on a basket of currencies to a free-floating and self-standing rouble,

Transportation

15. Urges the Commission to negotiate, with Russia, agreements on frontier transit arrangements in order to facilitate the free flow of trade and people; considers that it is to be seen as an improvement that the Helsinki agreement of 24 November 2006 has been reached on the abolition, until 2013, of non cost-related fees for European airline companies in relation to flights over Siberia, which discriminated against those companies.

PROCEDURE

Title

Economic and trade relations between the EU and Russia

Procedure number

2006/2237(INI)

Committee responsible

INTA

Opinion by
  Date announced in plenary

ECON
28.9.2006

Enhanced cooperation – date announced in plenary

 

Drafts(wo)man
  Date appointed

Robert Goebbels
25.9.2006

Previous drafts(wo)man

 

Discussed in committee

23.1.2007

28.2.2007

 

 

 

Date adopted

10.4.2007

Result of final vote

+:

–:

0:

41

1

0

Members present for the final vote

Zsolt László Becsey, Pervenche Berès, Udo Bullmann, Ieke van den Burg, David Casa, Jonathan Evans, Elisa Ferreira, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Robert Goebbels, Donata Gottardi, Gunnar Hökmark, Karsten Friedrich Hoppenstedt, Sophia in 't Veld, Othmar Karas, Piia-Noora Kauppi, Christoph Konrad, Astrid Lulling, Gay Mitchell, Cristobal Montoro Romero, Lapo Pistelli, Post Joop, John Purvis, Alexander Radwan, Dariusz Rosati, Heide Rühle, Eoin Ryan, Antolín Sánchez Presedo, Manuel António dos Santos, Olle Schmidt, Lydia Shouleva, Peter Skinner, Margarita Starkevičiūtė, Ivo Strejček, Gianluca Susta

Substitute(s) present for the final vote

Jorgo Chatzimarkakis, Mia De Vits, Harald Ettl, Zbigniew Krzysztof Kuźmiuk, Thomas Mann, Maria Petre, Gianni Pittella

Substitute(s) under Rule 178(2) present for the final vote

 

Comments (available in one language only)

 


PROCEDURE

Title

EU economic and trade relations with Russia

Procedure number

2006/2237(INI)

Committee responsible
  Date authorisation announced in plenary

INTA
28.9.2006

Committee(s) asked for opinion(s)
  Date announced in plenary

ECON
28.9.2006

AFET
28.9.2006

 

 

 

Not delivering opinion(s)
  Date of decision

 

 

 

 

 

Enhanced cooperation
  Date announced in plenary

 

 

 

 

 

Rapporteur(s)
  Date appointed

Godelieve Quisthoudt-Rowohl
23.11.2005

 

Previous rapporteur(s)

 

 

Discussed in committee

27.2.2007

21.3.2007

11.4.2007

 

 

Date adopted

21.5.2007

Result of final vote

+

-

0

21

0

1

Members present for the final vote

Kader Arif, Christofer Fjellner, Glyn Ford, Béla Glattfelder, Ignasi Guardans Cambó, Jacky Henin, Sajjad Karim, Ģirts Valdis Kristovskis, Erika Mann, Helmuth Markov, Vural Öger, Georgios Papastamkos, Godelieve Quisthoudt-Rowohl, Tokia Saïfi, Gianluca Susta, Zbigniew Zaleski

Substitute(s) present for the final vote

Jean-Pierre Audy, Panagiotis Beglitis, Elisa Ferreira, Małgorzata Handzlik, Eugenijus Maldeikis

Substitute(s) under Rule 178(2) present for the final vote

Sepp Kusstatscher

Date tabled

24.5.2007

Comments
(available in one language only)

 

Last updated: 6 June 2007Legal notice