"The Russian trade turnover with an expanded European Union will amount to a hundred billion euros, as we estimate. Current Russian trade tariffs for the ten countries shortly to join the EU are at an average 10 per cent, and will shrink to a mere 4 per cent after May 1, when they become EU members and join the Agreement on Partnership and Cooperation," the diplomat said to the Moscow-based newspaper, Vremya Novostei, in an interview it carries in today's issue.
Russia has long-term prospects to save on tariffs plummeting, though tariffs on the most sensitive commodities will, on the contrary, go up. Prospective rises concern fuel, raw materials and slightly processed items which, regrettably, account for a greater part of Russian exports. In the nearest future, Russian revenues from trade with the new EU countries will shrink by 250 to 450 billion euros, estimate ministerial experts.
Mr. Grushko proved his point with figures. Today, Russian aluminum exports to the ten countries are duty-free. May 1 will introduce 4-6 per cent tariffs to hamper exporters. Now, Russia is exporting duty-free barley to Cyprus - up to an annual ten thousand tons. As Cyprus joins the European Union, it will introduce import duties at a ceiling 93 euros per ton. To avoid problems, Russia insists on the EU taking into consideration its established commercial contacts with the ten.
Russia has highlighted 14 sensitive points, several of these concerning agriculture. Russia has bilateral veterinary understandings with the ten countries. From May 1 on, they will have to comply with EU regulations, which bar animal product imports from Russia.
More than that, the new patterns offer problems to Russian imports from the ten countries, added the diplomat.
The European Union encourages its member countries to diversify fuel import geography, with an emphasis on oil and gas. That, too, offers problems. Thus, imports from Russia make 90 per cent of Hungary's total petroleum market. Certain other countries of the ten receive from Russia all the gas they use. Prospects have recently appeared to retain established export/import arrangements. Russia is surely loath to lose its customary markets.
Importantly, the ten countries have an approximate total twenty reactors at nuclear plants built with Soviet assistance and fed on Russian nuclear fuel. Moscow is eager to come to an understanding with the European Union, which would ensure compliance with available long-term contracts and prolong Russia's privileged position, even though Euratom regulations expressly demand exporters diversified.
Mr. Grushko does not expect whatever EU sanctions against Russia. Further developments were blueprinted in 1999, when Moscow called on the European Union together to think about further relations in the context of forthcoming EU expansion. However, the Union was preoccupied with its own predicaments at the time, and has only now got down to tackling Russia-related matters, stocked up in plenty over the years.
"Russia has always regarded EU expansion as an objective process. We shall now have a neighbor with a huge market, a 450 million population, and with a tremendous potential. Today, the European Union accounts for 36 per cent of Russia's entire foreign trade turnover. From May 1 on, it will make roughly 51 per cent. It would be preposterous, despite all that, to avoid posing questions on matters which threaten Russia with losses and national interests abused - considering that the ten countries will make a big geopolitical shift by joining the EU. It is Russia's closest neighbors and partners in trade who are entering the European Union," Alexander Grushko rounded off his interview.