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European Commissioner for Enlargement and Neighbourhood Policy
Moldova: At Comrat University about myths and benefits of Association Agreement
Comrat University, Chisinau, Republic of Moldova
23 January 2013
*English translation of the speech that was delivered in Russian
Madam Rector, Governor, dear students, ladies and gentlemen,
I’m delighted to have the opportunity to engage with the people from Gagauzia today at this important moment in your history.
Our relationship itself has a long and rich history, not the least because your country – with its diverse regions –is a very important partner for the European Union. Every year, more and more Moldovan students, academics, and researchers – including from this university – engage in fruitful exchanges with their counterparts in the European Union. Our assistance has grown over years to unprecedented levels. What counts now is ensuring that all regions have fair access to these opportunities.
Some of you remember that the European Union - Republic of Moldova Partnership and Cooperation Agreement was signed in 1994, the very year when Gagauzia received its autonomy status, which the European Union warmly welcomed. We are very attached in the European Union to the European Charter of Local Self-Government, and I am told this is the case here also. This founding document reflects the core European values of mutual respect, tolerance, compromise and rule of law which lie also at the heart of our relationship – and of the Association Agreement that we initialled at the Eastern Partnership Summit in Vilnius.
The Eastern Partnership came from the realisation of the need for stronger European Union engagement to help our closest partners to anchor stability, democracy and prosperity in their countries. It was in no way conceived as a "political project" directed against any of our partners’ neighbours.
The Partnership provides cost-effective and result-oriented tools for deep modernisation, encouraging partners to undertake political association and economic integration with the European Union to the degree they wish to.
The Eastern Partnership is also about allowing people to move and meet. This is why mobility of citizens and visa liberalisation are such important parts of our policy. In fact, last November, the Commission proposed to allow visa-free travel to the Schengen area for Moldovan citizens holding a biometric passport, based on the successful implementation by Moldovan authorities of the Visa Liberalisation Action Plan. This proposal is now being discussed by the European Parliament and the Council, with a view to establishing a visa-free regime in the next few months, so – congratulations to Moldova and its citizens.
Since its inception, the Eastern Partnership has gradually widened and intensified its activities and reached beyond governments - to parliaments, local authorities, civil society and to businesses. This is important because without the involvement of all actors there is no way of transforming the economy and deepening democracy - and reaching the very tangible benefits this can bring. I mean democracy not as elections only, but democracy as a comprehensive system of checks and balances to ensure that citizens' fundamental, economic and social rights are effectively - not nominally - enforced and respected by the state.
The Association Agreement initialled in Vilnius is meant for that. And, what is most important, without impinging on Moldova's sovereignty.
Its trade part – the so called DCFTA: deep and comprehensive free trade area – aims at providing the economic means to build a prosperous future for all citizens
I have heard a lot of myths and misconceptions about the DCFTA. These myths need to be dispelled forcefully. To mention just a few of them, I have heard that:-
1. The DCFTA will just mean a flood of imports into your country.
This is wrong. Firstly, the Agreement is reciprocal so that there are equal opportunities for Moldovan business in the European Union market as there are for European Union companies in the Moldovan market. Secondly, European Union products are already widely accepted in the Moldovan market with few barriers to entry except for relatively low tariffs. This means the impact of tariff liberalization will be very limited.
2. The Agreement will destroy whole sectors of the Moldovan economy.
This is wrong. In fact, the Agreement will allow the Moldovan economy to catch up with the European Union in terms of competitiveness, and therefore to expand the benefits of the new, balanced terms of trade with the European Union, the largest single market in the world.
The most sensitive sectors (for instance, agriculture, which is so important to your region) will have generous transitional periods that will allow the necessary time for adaptation. It is in all our interests to secure a smooth transformation of Moldova's economy. (In fact, in order to support Moldova in sensitive areas last year we lifted the European Union wine import quota; this should have direct positive fallouts for Gagauzia.)
The resulting prosperity will be lasting because it will be based on trade relations with prosperous and reliable partners – which will also offer a safe shield against possible trade disruption with other partners.
3. Another myth: there are no opportunities for Moldovan businesses in European Union markets
Wrong, obviously. We heard the same after the Russian ban on Moldovan wines in 2006; experience has proven, on the contrary, that Moldovan producers managed to sell more and more to the European Union market. Let us remember that the European Union is the largest single market in the world, with a population about 140 times that of Moldova at 500 million consumers. For Moldova to easily and effectively sell to this market, its product safety and health standards must be aligned with those of the European Union. The DCFTA will enable Moldova to go through this process, and give Moldovan products open access to a market valued at EUR 15,000 billion per year.
4. The Agreement will only benefit large agricultural and industrial manufacturers.
Not true. While there will be huge and immediate opportunities for large producers, aligning Moldova's laws with those of the European Union (and this process is well underway now) will mean that all businesses will gradually apply these rules. This will ultimately help small and medium sized producers be competitive and trade also into the European market.
Moreover, the DCFTA also covers other areas - such as access to the European Union services markets.
In addition, harmonisation in public procurement will provide opportunities to directly participate in public tenders for works, supplies and services at the European Union, national and regional levels - worth almost EUR 2,000 billion per year.
5. The DCFTA will entail costs that Moldova cannot afford, without proper compensation.
Not true. First, we are talking about investments, not costs. Like any investment, investments in the DCFTA will yield a return. All independent studies show that this return - in terms of prosperity - will be huge and fast for Moldova and its citizens: in the short-term a €75 million increase in revenues; in the longer term, almost the double.
Second, besides these evident benefits, the cost of DCFTA related reforms and legal approximation are already, and will continue to be borne partly by the European Union - not only in terms of hardware and training to implement, say, quality standards, but also in long-term projects – aiming, for example, to improve the employability of Moldovan citizens through the vocational education and training programme.
Last but not least, let me reiterate: the Association Agreement is not only a trade pact, but a comprehensive framework for deepening democracy, improving governance, ensuring the rule of law and enforcing fundamental freedoms.
Looking to the future, now that the text of the Agreement is technically finalised and published (its Russian translation was published the day before yesterday), the goal is clear and comprehensible. It is not a vaguely defined project based on geopolitical rhetoric. Its implementation starts already now. It will require the same amount of energy and passion as was invested in the negotiations, if not more.
Ambitious agendas demand ambitious reforms. Moldova - and Gagauzia - continues to face formidable social and economic challenges. The country needs consolidation, mutual respect and pro-active dialogue, not discord, to overcome these challenges.
Ladies and gentlemen,
The time has come to strengthen engagement with society as a whole and explain concretely the benefits and opportunities stemming from closer association with the European Union. I see the Association Agreement and its DCFTA as a nation-wide project, in which each of you will have a role to play. The Agreement is designed for Moldova, for Gagauzia, for each and every citizen: it is your Agreement. Make the best of it; the European Union will stand by you.
Thank you for your attention.