The EU’s offer of concluding the Association Agreements (AA) including the Deep and Comprehensive Free Trade Agreement (DCFTA) represented a watershed in the EU’s policy towards the post-Soviet states. The AA obliges the associated countries to adopt the trade related acquis to ensure consistency of the internal market. It represents a shift from vague reform guidance to a legal regime comprising detailed and binding obligations related to access to the single market.
Prior to the launch of the DCFTA negotiations, EU instruments, such as the Partnership and Cooperation Agreement (PCA), ENP Action Plans, helped familiarize partner countries with EU regulations, but with a limited impact on domestic change owing to their vagueness. Even though the ENP Action Plan adopted in 2005 was more detailed than the PCA, it still remained a fairly generic document with vaguely-worded and numerous priorities for action, leaving the Moldova government to decide on the scale and timing of their voluntary convergence.
The Association Agreement shifts relations with Moldova from soft- to hard-law. Trade related contents (i.e. DCFTA) are the most extensive and, in many respects, important part of the agreement as it allows for the opening of the single market to countries which do not have an explicit membership perspective. To protect the cohesion of the single market, the agreement contains extensive detailed and binding provisions on the partner countries to align its laws and policies with those of the EU (acquis). Under the DCFTA, advanced economic integration is not limited to tariffs but extends to legal and regulatory convergence with EU standards. The DCFTA thereby influences the quality of democracy, governance and the rule of law in the partner countries.
In essence, the implementation of the DCFTA profoundly impacts on the regulatory framework of the country associated with the EU in a wide range of areas. As a result, the implementation of the agreement carries a promise of a major transformative effect on the state and economy in the associated countries. However, because of its ambitions and scope, the DCFTA presents not only a massive opportunity but also a considerable challenge, one which is compounded by Russia’s use of punitive measures vis-à-vis Moldova to raise the cost of integration with the EU.
This paper “The Deep and Comprehensive Free Trade Agreement in Republic of Moldova in a comparative context with other Eastern Partnership countries” reviews the content of the DCFTA in more detail, the opportunities and challenges related to the implementation as well as Russia’s role in undermining Moldova’s resolve to pursue closer integration with the EU. The analysis is set in a comparative context with references to Ukraine and Georgian experiences.
This Policy Brief is published in the framework of the EU-Moldova Think Tank Dialogue, supported by the Ministry of Foreign Affairs of Romania through its Official Development Assistance Programme, in partnership with the United Nations Development Programme (UNDP) – the Bratislava Regional Centre. The project is implemented by a consortium of organisations, including the Romanian Centre for European Policies (CRPE) in Bucharest and its Moldovan Branch in Chisinau; the European Policy Centre in Brussels; and the Foreign Policy Association in Chisinau