The practical implementation of the Russia-EU The practical implementation of the Russia-EU Common Economic Space through dialogueCommon Economic Space through dialogue

International Conference: “International Standardisation – the effective instrument for International Conference: “International Standardisation – the effective instrument for

raising the competitiveness of Russian industry”raising the competitiveness of Russian industry”

Moscow, 10 April 2007Moscow, 10 April 2007

Nick BurgeNick BurgeRelations with Russia and CIS countriesRelations with Russia and CIS countries

International UnitInternational UnitDG Enterprise and IndustryDG Enterprise and Industry

European CommissionEuropean Commission

Enterprise and Industry Directorate-GeneralEuropean Commission

Political and economic perspective (1)Political and economic perspective (1)

Russia is the 3rd largest EU trade partner (8,4%) after the USA (17,9%) Russia is the 3rd largest EU trade partner (8,4%) after the USA (17,9%) and China (10,3%)and China (10,3%)

The EU is Russia's main trading partner, accounting for 51,5 % of its The EU is Russia's main trading partner, accounting for 51,5 % of its overall trade turnover in 2007overall trade turnover in 2007

EU’s exports to Russia are diversified: e.g. machinery and transport EU’s exports to Russia are diversified: e.g. machinery and transport equipment (46%), chemicals (15%), manufactured goods (13%), food and equipment (46%), chemicals (15%), manufactured goods (13%), food and live animals (7%)live animals (7%)

EU’s imports from Russia are mainly energy/mineral fuels (67%). Other EU’s imports from Russia are mainly energy/mineral fuels (67%). Other imports include manufactured goods (10%), primary products (6%) and imports include manufactured goods (10%), primary products (6%) and chemicals (3%)chemicals (3%)

EU-Russia trade expanded by 17,6% in 2007EU-Russia trade expanded by 17,6% in 2007

ConclusionConclusion: growing economic interdependence from which both : growing economic interdependence from which both sides can benefitsides can benefit

Political and economic perspective (2)Political and economic perspective (2)

Common Economic Space Roadmap – May 2005Common Economic Space Roadmap – May 2005 Aims: Aims:

Open and integrated market between EU and Russia;Open and integrated market between EU and Russia; Put in place conditions to increase opportunities for businesses on Put in place conditions to increase opportunities for businesses on

both sidesboth sides Promotion of trade and investment and enhance competitiveness of Promotion of trade and investment and enhance competitiveness of

Russian and EU economiesRussian and EU economies Strengthen economic cooperationStrengthen economic cooperation

Methodology: regular formal dialoguesMethodology: regular formal dialogues 16 government-to-government dialogues now established16 government-to-government dialogues now established including a Regulatory Dialogue and a Dialogue on Industrial and including a Regulatory Dialogue and a Dialogue on Industrial and

Enterprise PolicyEnterprise Policy

Political and economic perspective (3)Political and economic perspective (3)

WTO AccessionWTO Accession Includes obligations to comply with Technical Barriers to Trade Includes obligations to comply with Technical Barriers to Trade

(TBT) Agreement(TBT) Agreement TBT is basis for Russian and EU legislation on technical TBT is basis for Russian and EU legislation on technical

regulations and standards: in Russia has helped to drive reformregulations and standards: in Russia has helped to drive reform

Future EU-Russia Agreement:Future EU-Russia Agreement: Will take forward CES aims (as minimum)Will take forward CES aims (as minimum) Likely to continue and develop structure of dialoguesLikely to continue and develop structure of dialogues i.e. Regulatory cooperation between EU and Russia expected to i.e. Regulatory cooperation between EU and Russia expected to

remain a long term feature of relationshipremain a long term feature of relationship

Possible future agreement on trade and investments ?Possible future agreement on trade and investments ? TBT +TBT + Should contain significant non-tariff elements (i.e. regulatory Should contain significant non-tariff elements (i.e. regulatory

convergence)convergence)

Regulatory and Industrial Policy dialogues (1)Regulatory and Industrial Policy dialogues (1)

Established Dec 2005: Minister Khristenko and Vice President Established Dec 2005: Minister Khristenko and Vice President VerheugenVerheugen

Objectives (summary):Objectives (summary): Achieve more compatibility between Russian and EU technical regulations, Achieve more compatibility between Russian and EU technical regulations,

standards and conformity assessment procedures, including convergence standards and conformity assessment procedures, including convergence where possible;where possible;

Enhance transparency of regulatory activity;Enhance transparency of regulatory activity; Promote the use of international standards;Promote the use of international standards; Improve regulatory and administrative environment for businesses to Improve regulatory and administrative environment for businesses to

enhance competitiveness.enhance competitiveness.

Parties involved:Parties involved: European Commission (DG Enterprise and Industry) and RF Ministry of Industry and European Commission (DG Enterprise and Industry) and RF Ministry of Industry and

EnergyEnergy Other interested Ministries and DGsOther interested Ministries and DGs Business (Russian and EU)Business (Russian and EU) Other interested parties (standardisation bodies, technical institutes)Other interested parties (standardisation bodies, technical institutes)

Regulatory and Industrial Policy dialogues (2)Regulatory and Industrial Policy dialogues (2)

12 sectoral subgroups established12 sectoral subgroups established

Regulatory Dialogue subgroups

Automotive IndustryTextiles ICT, Radio and TelecomPharmaceuticalsConformity Assessment andStandardisationForest-based IndustriesConstruction ProductsMachinery and Electrical Equipment

Industrial Dialogue subgroups

Automotive IndustryTextiles IndustryMining and MetalsChemicals IndustrySMEs and Enterprise PolicyAerospace Industry

Regulatory and Industrial Policy dialogues (3)Regulatory and Industrial Policy dialogues (3)

Methodology:Methodology: Meetings 2-3 times a yearMeetings 2-3 times a year Work on basis of agreed work programmeWork on basis of agreed work programme Business fully involved in subgroupsBusiness fully involved in subgroups Plenary meetings twice a year (next in Brussels May 21-22)Plenary meetings twice a year (next in Brussels May 21-22) Regular reports to political sponsors and EU-RU SummitsRegular reports to political sponsors and EU-RU Summits

Comments:Comments: First time such regulatory cooperation attempted between EU and RussiaFirst time such regulatory cooperation attempted between EU and Russia Exchange of information and regular contact positive in itselfExchange of information and regular contact positive in itself Cannot expect every sector to deliver same level of results or work at same Cannot expect every sector to deliver same level of results or work at same

speedspeed Medium to long term processMedium to long term process

Some examples of regulatory cooperation so farSome examples of regulatory cooperation so far

Considerable efforts made to explain REACH (new EU chemicals Considerable efforts made to explain REACH (new EU chemicals legislation)legislation)

Good level of coordination and cooperation between EU and Russia on Good level of coordination and cooperation between EU and Russia on international automobile standards and regulations at UNECEinternational automobile standards and regulations at UNECE

Russia willing to allow regulatory dialogue to support its programme of Russia willing to allow regulatory dialogue to support its programme of reform of technical regulations and standardsreform of technical regulations and standards

IMEI codes (identification numbers for mobile phones) : legislative IMEI codes (identification numbers for mobile phones) : legislative requirements now harmonised requirements now harmonised

Dialogue has contributed to the resolution of the TBT section of Dialogue has contributed to the resolution of the TBT section of Russia’s WTO accession Working Party ReportRussia’s WTO accession Working Party Report

Good working atmosphere and relationships mean that trade disputes in Good working atmosphere and relationships mean that trade disputes in sectors covered by dialogue less likely to occur sectors covered by dialogue less likely to occur

Important that dialogues lead to concrete outputsImportant that dialogues lead to concrete outputs

Therefore, in 2007 it was agreed that:Therefore, in 2007 it was agreed that:

Dialogues would support Russia’s programme of reform of Dialogues would support Russia’s programme of reform of its technical regulations and standards: subgroups to be its technical regulations and standards: subgroups to be consulted on draft legislationconsulted on draft legislation

Each subgroup to identify the 2 or 3 most important issues Each subgroup to identify the 2 or 3 most important issues to resolve in their sector and make joint recommendations to resolve in their sector and make joint recommendations for their resolutionfor their resolution

These recommendations to be reviewed by Vice President These recommendations to be reviewed by Vice President Verheugen and Minister Khristenko in 2008Verheugen and Minister Khristenko in 2008

Future developmentsFuture developments

Next stepsNext steps

Meeting between VP Verheugen and Minister Khristenko Meeting between VP Verheugen and Minister Khristenko to review progress, May 15-16, Moscowto review progress, May 15-16, Moscow

Meeting of Dialogue Working Groups (plenary session) Meeting of Dialogue Working Groups (plenary session) May 22-23, BrusselsMay 22-23, Brussels

Seminar on standardisation and conformity assessment, Seminar on standardisation and conformity assessment, June (Moscow)June (Moscow)

New technical assistance project to begin: to support New technical assistance project to begin: to support Russia’s reform of technical regulations and standardsRussia’s reform of technical regulations and standards

Future challengesFuture challenges

Explore possibilities for mutual recognition:Explore possibilities for mutual recognition:

More tricky than it sounds: EU has had mixed experience of mutual More tricky than it sounds: EU has had mixed experience of mutual recognition agreementsrecognition agreements

Requires much more than just a legal agreement: needs shared Requires much more than just a legal agreement: needs shared legislation and standards, similar methods of implementation, dispute legislation and standards, similar methods of implementation, dispute resolution mechanism and mutual trustresolution mechanism and mutual trust

Tackle the major differences in current EU and Russian approaches, Tackle the major differences in current EU and Russian approaches, i.e.:i.e.:

Voluntary or mandatory use of standardsVoluntary or mandatory use of standards Conformity assessment by certification; or by supplier declaration of Conformity assessment by certification; or by supplier declaration of

conformity (SDOC) supported by market surveillanceconformity (SDOC) supported by market surveillance These different approaches require different institutional and These different approaches require different institutional and

administrative structures to implement and manage the legislationadministrative structures to implement and manage the legislation

Thank you for listeningThank you for listening

Nick BurgeNick Burge

Relations with Russia and CIS countriesRelations with Russia and CIS countriesInternational UnitInternational Unit

DG Enterprise and IndustryDG Enterprise and IndustryEuropean CommissionEuropean Commission