16.07.2014 Author: Seth Ferris

EU Association Agreements – What’s Wrong With Getting Nothing?

234234On June 27th three former Soviet republics, Georgia, Moldova and Ukraine, initialled their long-awaited Association Agreements with the European Union. The usual speeches were made, about it being a historic day, the beginning of a new era of partnership and democracy, etcetera. The most important statement however came from President of the European Commission Jose Manuel Barroso, who stated that the EU wanted to hold continuing dialogue with Russia, to defray any possible misunderstandings over these agreements.

Russia has attracted much criticism for describing these agreements as potential threats to its interests because the agreements actually give Georgia, Moldova and Ukraine very little, and the EU even less. But they have been initialled anyway, and therein lies the threat.

Smoke and mirrors

The EU is a notoriously undemocratic institution. Its structure pits directly elected, indirectly elected and appointed institutions against each other with the stated purpose of preventing both EU citizens and their governments controlling its actions. Many decisions are taken in secret, on the basis of evidence the public are not allowed to see or even know the existence of, which are then binding on all member states. Migration policy, which is of core importance to the continent and the whole world, is decided in exactly this way.

Georgia, Moldova and Ukraine have made no secret of the fact that they wish to eventually join the EU and thus, one day, conduct their own business in this fashion. The Association Agreements are the first step in that process.

If the agreements offered more tangible benefits to the new associates this would not be a particular concern. But each country has so far been disappointed with the EU at every step of the way. They have not seen swift enough action on granting visa-free travel and trade concessions and each country has fought wars with Russia, and effectively lost territory to it, despite the EU security umbrella. But they have initialled these agreements nonetheless, and therefore their primary aim is not to build stronger economies but to play this covert, anti-democratic game, with incalculable consequences for all involved.

Most, if not all, of the countries which have become EU members had difficulty adapting to the EU’s membership demands, or still do. Spain, for example, was given three years to get its industry up to speed before joining, with little assistance, whilst at the same time depressing its agricultural production to such an extent that industry could not cover the income shortfall. In The Netherlands, a founding member of the EU, it has become a national pastime to complain about how expensive everything is since the guilder was abolished for the sake of the single currency.

But not a single EU member has ever left it. Despite all the problems they encounter, and sometimes in the face of great domestic hostility to the EU, governments soon discover that the power of those murky back rooms is too great to ignore. All the jobs in each country which allegedly depend on the EU do so simply because agreements have been signed, which could just as easily be signed with anyone else, and individual nations and governments have little effect on EU policy, which is presented to them, set far in advance, when they take over the rotating presidency. But none of that seems to matter, next to being at the heart of a secret network which can operate without oversight.

This is the threat the EU Association Agreements pose to Russia. The new associates have chosen to place being part of a secret cabal ahead of any other consideration, and have done so to show they are independent of Russian influence. With the EU developing a common foreign and security policy, the further they go along this path, the more they will be obliged to contradict Russia and other non-members for the sake of it, in an unfair, uncompetitive way even they cannot control. The Russian objections to these agreements are the opposite of those generally presented, and are well founded.

Dreams and reality

Georgia, Moldova and Ukraine are not trying to integrate with the EU out of the goodness of their hearts, to bestow on it the benefit of their prosperity. The EU is seen as the passport to a better life. Because EU countries are relatively more prosperous, opening the European market to the new associates should help them develop the same prosperity, and free movement of goods and people will increase exports and get people better jobs in the West, providing them money they can send home to their families.

It is true that many citizens of the poorer EU countries, such as Poland and Romania, gravitate towards the wealthier ones in search of work. They are prepared to do the dirty, low paid jobs which locals won’t do, and indeed in some areas, such as catering, they exclude local workers from the market and turn them into an employment ghetto for fellow nationals. Even in these circumstances, migrants are still often better off financially than they would be at home.

Nevertheless, even if they send home as much of their wages as they can this does not benefit their home countries. Migrants take their skills with them, spend most of their earnings in their host country and the structural weaknesses of their domestic economies, which were not resolved when these low-paid workers lived and worked there, remain.

Indeed, when “employment ghettos” have been established those in charge of those industries often seek to set up operations in the countries their workers come from, where they can pay even lower wages to people who are more skilled, because they know the language and culture of the customers. It is not coincidental that even in Ukraine, relatively prosperous compared to Georgia and Moldova, the Turks and Iranians who largely run the one star hotel and bar sectors in Germany, the UK or France are setting up increasing numbers of similar facilities there.

Each of the three new associates considers itself ripe for investment because it has a cheap labour force. However analysis of successive Human Development Indexes demonstrates that countries with a cheap labour force do not develop: they need something they can sell, on their own initiative, which will make the investors come to claim the greater portion of it for themselves.

Nor does access to markets help if you do not have the products or raw materials to offer. International commerce can source and process what it wants, remanufacturing in EU countries to comply with EU regulations, and if it isn’t doing so now, it will take limited further interest in doing so if the source countries have association agreements with the EU, which simply save on paperwork, not make products and materials intrinsically more attractive.

Similarly, the EU does not guarantee the security of its associates. Both Georgia and Moldova, which contain the separatist regions of Abkhazia and South Ossetia and Transdnistria respectively, sought guarantees in their Association Agreements that the EU would not only continue to recognise their territorial integrity but actively support the reunification of their countries. The wording they finally agreed to fell far short of what was desired.

In Ukraine the EU’s insistence that the country turn its back on Russian assistance if it wanted to be an EU associate was a contributing factor to what has now become a civil war. Had the EU been prepared to provide real support for Ukraine if it had done what it wanted the pro-European side would not have been hijacked by neo-Nazi elements and terrorists inserted by the US, like the snipers in Maidan Square. By keeping the peace rather than provoking war the EU would have won the respect and confidence of all sides, leaving no room for extreme elements to hijack the pro-EU cause which is, presumably, also its own.

In political terms too the new associates have been sold a pup. Despite gaining access to the corridors of power they are twenty years too late to be listened to. The Eastern expansions of 2004 and 2007 have now created a two-tier Europe, in which the likes of Bulgaria and Latvia, though theoretically the equal of the other members, are only able to play a part through personalities rather than in their own right.

No one seriously thinks that the less prosperous countries have the influence of France, Germany or even tiny Luxembourg, which has several EU institutions based in it just to give it money. Indeed they are seen as problem members, net receivers rather than givers, who will always owe the big countries. They may have a vote, but have negligible influence on decision-making, for the same reason democratic but dependent Ireland was represented at fewer global forums than dictatorial but economically dynamic Portugal before 1974. Georgia, Moldova and Ukraine fall even more into this mould.

But though the indebted countries aren’t likely to be listened to in themselves their rulers can pull fast ones. Every ruler everywhere loves the idea that there is somewhere where they do not have to answer to anyone and can do what they like, be it good or bad. The structure and practice of the EU allow this, and has persuaded even countries which need bailouts and suffer George Soros-induced collapses to remain members. This is its attraction, and its threat to member and non-member alike. It may not be how Russia expresses the threat, but that does not alter the fact it is there.

The devil you know and the devil you don’t

Economically, Russia has little or nothing to fear from these agreements. It has been estimated that these three countries account for around one quarter of one percent of Russia’s balance of trade, and that Russia may lose 1 billion dollars, an insignificant sum for a country its size, as a result of the implementation of the new trade terms set out in the agreements. This amount could be recovered in a few energy supply deals, which will ultimately prove much more beneficial both economically and in terms of influence.

The agreements do not carry much political threat either, because the longstanding ties between Russia and the three new EU associates, demonstrated by patterns of migration and remittance, give Russia the levers to continue exercising significant influence in them for generations to come, should it wish to do so. The presence of Georgia, Moldova and Ukraine in the EU, as second tier members, is likely to decrease their individual bargaining powers without adding anything to the EU’s own, as it is not seriously intending to defend these countries in other than a formalistic way.

Russia’s problem is that Georgia, Moldova and Ukraine know all this too. But still they want the possibility of unaccountable action the EU gives. It is true that if they entered into an international alliance established by Russia, for example the Customs Union, they would inevitably end up being in Russia’s gravity field once again, and that is the last thing these countries want. But at least Russia has some real existence, can be acknowledged and spoken to, and the world can be rallied to prevent it establishing a new Soviet Union. You can’t fight the secret, invisible forces at work in the EU because no one will ever know who they really are, and the EU is designed to keep it that way.

When Thomas Eagleton, George McGovern’s running mate in the US presidential election of 1972, was forced to step down because he had received treatment for mental illness, one of the reasons given was, “we can’t have an unstable man with his finger on the nuclear button”. In the EU, everyone theoretically has their finger on the button but nobody knows who really does. Furthermore, they have put themselves beyond finding out by being part of it. Russia is right not to want such a scenario to continue, particularly on its doorstep.

Seth Ferris, investigative journalist and political scientist, expert on Middle Eastern affairs, exclusively for the online magazine “New Eastern Outlook”.