Russia, Moldova Discuss Potential For EAEU Free Trade

Posted by

Russia and Moldova have agreed to lift trade restrictions and to hold discussions concerning the breakaway Russian-supported Transnistria region.

The landlocked country is an ex-Soviet satellite sandwiched between Romania and Ukraine and is one of Europe’s poorest nations.

Dmitry Kozak, Deputy Head of Russia’s Presidential Administration has been quoted as saying “We agreed to cooperate in mutual trade matters, duty-free trade and the lifting of restrictions for Russian exporters.” He also pledged “reciprocal moves of the Russian side regarding deliveries of Moldovan agricultural products to the Russian market”.

After meeting the Russian envoy, Moldova’s pro-Western President, Maia Sandu, said Chisinau wanted a pragmatic and constructive dialogue.

“We discussed several important topics … including exports of Moldovan agricultural products to the Russian market and the new contract for the supply of natural gas for our country. We also addressed the issue of settling the Transnistrian conflict,” Sandu said, referring to the breakaway region. The Transnistrian leader, Vadim Krasnoselski, said he opposed the withdrawal of Russian troops from the region. Moldova has repeatedly asked for the withdrawal of Russian troops but without any success. Transnistria is a breakaway state in the narrow strip of land between the Dniester River and the Ukrainian border that is internationally recognized as part of Moldova. Its capital city is Tiraspol. It has existed since 1990 when the Transnistria Republic was established in hopes that it would remain within the Soviet Union should Moldova seek independence, which happened in August 1991. Shortly afterwards, a military conflict between Transnistria and Moldova occurred with a ceasefire put in place in July 1992. Russia holds the peace but does not formally recognise Transnistria as an independent state.

Russia imposed an embargo on Moldovan exports in 2013 after the former Soviet republic signed an Association Agreement with the European Union, the first step towards EU membership.

The suggestion of free trade between Russia and Moldova means that a suggestion has been made for Moldova to join the Eurasian Economic Union. That will be studied as it is unlikely that Moldova will be accepted at this stage into the European Union, although the current Moldovan President is pro-Brussels. Joining the EAEU would help solve some of Moldovia’s economic problems, Russia agreeing to resume trade between the two countries can be viewed as a test case to see how beneficial Russian trade is to Moldova. Moldova became an observer state to the EAEU in 2018.

Moldova’s population is just over 3 million with a GDP of about US$12 billion. It has an emerging IT development infrastructure. Of the limited Russian trade volumes, much of this is in the agricultural sector.

Related Reading

 

About Us

Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

Leave a Reply