EN Official Journal of the European Union C 318/19

Opinion of the European Economic and Social Committee on ‘The Eastern Partnership and the eastern dimension of EU policies, with a particular emphasis on the EU's agricultural policy, food safety, undisturbed trade, greater cooperation and development aid, and strategic partnership’ (exploratory opinion)

2011/C 318/03

Rapporteur: Seppo KALLIO

On 30 November 2010, the future Polish EU Presidency decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on

The Eastern Partnership and the eastern dimension of EU policies, with a particular emphasis on the EU's agricultural policy, food safety, undisturbed trade, greater cooperation and development aid, and strategic partnership

(exploratory opinion).

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 21 June 2011.

At its 473rd plenary session, held on 13 and 14 July 2011 (meeting of 14 July), the European Economic and Social Committee adopted the following opinion by 149 votes to 1.

1. Conclusions and recommendations

1.1 The EESC stresses that the objectives of the partnership countries and their readiness to undertake political and economic reforms are important in the negotiations on association and free trade agreements with the European Union.

1.2 The EESC regards as an important question the extent to which partnership countries have the ability or political will to undertake the economic and social reforms required by these agreements.

1.3 The EESC believes it is crucial that the association and free trade agreements aim at reconciling the interests of the partnership countries and the EU so that future progress benefits all parties.

1.4 In the Committee's view, the EU's negotiation strategy must take greater account of the position of the agricultural sector and the significance of agricultural policy for cooperation between the EU and the partnership countries. The agriculture and food sector must play a more concrete role in cooperation agreements between the EU and the partnership countries.

1.5 The EESC stresses that until now the position of agriculture and agricultural policy has been non-existent in the Platform on Economic Integration and Convergence with EU Policies. Agriculture, food production and agricultural policy must be included among the subjects discussed.

1.6 The EESC is strongly of the view that agriculture is an extremely important sector for the economic, social and regional development of the partnership countries. Meeting the objectives set will require favourable agricultural development. Investing in agriculture and developing the sector are also key conditions for reducing poverty in rural areas.

1.7 The EESC regards as important the development of the competitiveness of the partnership countries' agricultural products and foodstuffs as well as the development of food safety and the quality of food. Observing the regulations and standards set out in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, (SPS Agreement),has proven to be a major problem in ensuring market access for foodstuffs from the partnership countries. Ensuring food safety in EU markets requires adherence to quality criteria. In order to overcome these problems, the partnership countries need technical and financial support and advice.

1.8 The difficulty of partnership countries in meeting the WTO SPS Agreement's foodstuff regulations and standards has been identified as a key bottleneck in the trade of agricultural products. However the Commission must whenever and wherever possible seek to negotiate mutual recognition in those cases where the Eastern Partnership countries already have separate existing and effective SPS standards in place, even should these not be strictly compatible. Equally both the EU and these countries must also exercise maximum vigilance to ensure that, once Deep and Comprehensive Free Trade Agreements (DCFTAs) come into effect, parties from third countries are not able to find ways to import illegal or substandard foodstuffs – or other recognised threats to human, animal and plant health – into the EU through the back door. The EESC proposes that the subject of SPS become a new special point under the flagship initiatives.

1.9 The EESC stresses that the transition to a market economy requires a change of mindset, development of legislation and institutions as well as comprehensive technical capabilities in adapting the methods and practices of primary production, processing and external trade.

1.10 In the Committee's view, cooperation must be strengthened especially in the areas of training and research, where joint research projects, visits and seminars are important in developing mutual understanding and operational models.

1.11 The EESC also emphasises that it is in the shared interest of the EU and partnership countries to prevent the damaging environmental effects of fertilisers and pesticides, in both soil and water systems. Ensuring the nutrient cycle is also an important development objective.

1.12 The EESC believes that cooperation between the EU and partnership countries on energy matters is also very important for agricultural development.

1.13 The EESC emphasises that observance of fundamental labour rights approved by the International Labour Organization (ILO) is a key element of respect for human rights. It is important that internationally approved labour standards are adhered to in the deep and comprehensive free trade areas being created between the EU and the partnership countries.

1.14 The EESC believes that there should be considerable additional support for food sector organisations from the Eastern Partnership countries. Organisations must be involved extensively in the civil society forum. This also concerns a stronger role for the EESC and balanced participation in this important work of the organisations it represents.

1.15 The EESC believes that the EU and the governments of the partnership countries must support and encourage the building of organisations' capacities and their participation in the preparation of the Eastern Partnership strategy and the development of processes so that a free civil society can make a strong contribution to the development of cooperation in agriculture.

2. Background

2.1 The European Union has an interest in seeing stability, better governance and economic development at its Eastern borders. The European Neighbourhood Policy has been successful in forging closer relations between the EU and its neighbours. The Eastern Partnership policy, which was approved in Prague in 2009, should go further. Our partners (1) in Eastern Europe and the Southern Caucasus all seek to intensify their relations with the EU. The EU strongly supports these countries in their efforts to come closer to the EU. Essential reforms are being strongly promoted through the Eastern Partnership, which is part of the European Neighbourhood Policy, because the partnership countries currently suffer from significant shortcomings in terms of political objectives and the practical implementation of democracy.

2.2 According to declaration by the European Council (2), the Eastern Partnership will bring about a significant strengthening of EU policy with regard to the Eastern neighbouring and partnership countries by seeking to create the conditions for political association and further economic integration between the European Union and its Eastern partners.

2.3 The objective of bilateral negotiations is to conclude an association agreement with each country, a key element of which is a Deep and Comprehensive Free Trade Area (DCFTA (3)) (4).

2.4 The objectives of the partnership countries and the political willingness to conclude agreements with the European Union are important for the progress of negotiations. The key question is to what extent the partnership countries have the ability or political will to undertake the economic and social reforms required by these agreements.

2.5 Partnership countries have committed themselves in the Prague declaration to political and economic reforms. Democracy, good governance and promoting the rule of law, rooting out corruption as well as respect for human rights and ensuring the participation of civil society are important. The starting point for economic reforms is the application of market economy practices and bringing rules and regulations into line with EU legislation (5).

2.6 The multilateral path of the Eastern Partnership supplements bilateral relations by establishing cooperation, open dialogue and exchange of best practices and experiences. Cooperation is developed through thematic platforms and certain flagship initiatives (6) as well as through the civil society forum (7). The convergence of the agricultural sector and agricultural policy are dealt with by the Platform on Economic Integration. The role of agriculture and agricultural policy has until now been non-existent. They must be included among the subjects discussed.

2.7 Agriculture and food production are vital industries in all Eastern Partnership countries. Their share of GDP is high and they employ a considerable number of people. The strong growth of agricultural and food production is a condition for growth of the entire economy and for reducing poverty at the same time.

2.8 This opinion:

a) stresses the need to spell out the EU's strategic approach to the Eastern Partnership countries, including in the area of agricultural policy,

b) examines implemented or ongoing agricultural sector projects supporting Eastern Partnership objectives, and

c) draws attention to the fact that agricultural issues are linked to many EU policy areas and to their objectives in the partnership policy.

2.9 The EESC suggests that the EU negotiation strategy should take account of the importance of agricultural policy in cooperation between the EU and the partnership countries and the position of the agricultural sector in the development policy of the partnership countries.

2.10 The partnership countries are important producers of grain, livestock products, vegetables and roots as well as fruits and grapes. Ukraine is one of the most important grain producers in the whole world. In 2008, it was the eight biggest producer and seventh biggest exporter. While productivity is improving, the annual crop yield could still rise considerably. Whereas Ukraine's annual yield varies between 40 and 50 million tonnes, the annual grain crop of the five other partnership countries comes to a total of some 15 million tonnes.

2.11 The EU-27 is the largest trading partner of Ukraine, Armenia, Azerbaijan, Georgia and Moldova (8) and the second biggest trading partner of Belarus (9). Over half of exports from Moldova and just under 50 % of exports from Armenia and Azerbaijan go to EU countries. In addition, agricultural products play a very important role in the Eastern Partnership countries' trade with the EU.

3. Strategic elements of agriculture and agricultural policy

3.1 The EESC stresses that agriculture is an especially important sector for the economic, social and regional development of the partnership countries. Improving food safety is also a key social objective for those countries. There is a desperate need for technologies and for production, processing and marketing expertise alone. Another objective of the partnership counties is to develop the quality and competitiveness of agricultural products and foodstuffs.

3.1.1 Another strategic element to consider is rural development policy, as a second pillar of the CAP, which makes it possible to use EU funds to improve the economic and social situation of rural areas and populations. It is not just a matter of farm production meeting EU requirements but also of safeguarding jobs and habitability in rural areas, in accordance with their culture and environmental measures to ensure sustainable rural development.

3.2 With a market of 500 million consumers, the European Union is the largest trading area in the world in terms of its purchasing power. The proximity of the markets provides the partnership countries and the EU with the possibility to boost trade and thus the conditions for economic growth.

3.3 The objective of the EU's agricultural and trade policy is to ensure the stability of the food markets in changing conditions. The policy pursued should ensure high-quality products at fair prices for European consumers. It is important that the policy creates stability for the markets, which provide for consumer needs while guaranteeing a fair income for farmers.

3.4 Maintaining food safety is one of the central objectives of the EU's agricultural and food sectors. Preventing animal and plant diseases and close monitoring of residues that are harmful to health ensure that foods are safe for consumers. These border control measures also apply to foods imported into the EU from partnership countries.

3.5 The EESC believes it is crucial that the association and free trade agreements aim at reconciling the interests both of the partnership countries and the EU so that future progress benefits all parties.

4. Starting points for the free trade negotiations and key questions

4.1 The negotiations on the free-trade area cover a wide range of trade-related issues: tariffs, services, customs formalities, regulations and standards set out in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), public procurement, geographical indications, trade defence instruments and technical border protection questions (10).

4.2 The negotiations with Ukraine on the deep and comprehensive free trade area (DCFTA) have been under way intensively for two years now. The negotiations started after Ukraine had officially become a member of the WTO in 2008 (11). There has yet to be a breakthrough in the negotiations but this goal may be achieved in 2011.

4.3 The start of equivalent negotiations on a free trade area requires WTO membership. Efforts are currently under way to launch negotiations with Moldova, Armenia and Georgia as quickly as possible. Moldova has indicated a willingness to push ahead with the negotiations quite quickly.

4.4 Azerbaijan is not yet a member of the WTO which means that free trade negotiations still cannot begin. In addition, the political conditions do not exist for free trade negotiations with Belarus.

4.5 Meeting the regulations set out in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) has proven to be a major problem in ensuring market access for agricultural products and foodstuffs. The WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) in addition to other EU environmental and health standards require Ukraine and the other partnership countries to carry out significant development activities. For this reason, the partnership countries need technical and financial support and advice.

5. Developing the agricultural sector in the partnership countries

5.1 The Eastern Partnership programme, which was agreed in Prague on 7 May 2009, raises to a new level financial cooperation between the EU and the six partnership countries. The EU has earmarked EUR 600 million to cooperation for the 2010-2013 period. Funding is channelled through the European Neighbourhood Policy and Partnership Instrument (ENPI) (12).

5.2 For the 2007-2011 period, there are 10-12 specific projects to develop agriculture and food safety (13). Many projects have been small. The project to upgrade Moldovan wine production has been the biggest. It is financed together with the European Investment Bank. The project began in 2010.

5.3 About half of the projects seek to improve food safety in the partnership countries by developing know-how, inter alia, in SPS activities. A few projects are geared towards developing the management and planning of agriculture. In 2009, Georgia was allocated just under EUR 2 million to improve the food safety of children at risk.

5.4 In the association negotiations with Ukraine both parties have stressed, among other things, the importance of promoting the competitiveness of agricultural production and the objective to take account of the quality elements of food (14). In practical terms, EU support in this sector should be geared towards developing institutions, advice and training.

5.5 It has been found in practice that the partnership countries undergo a long process to move from a planned to a market economy. There should be an effort to promote this process and consideration should be given to it. In addition to a change of mindset, the transition requires development of legislation and creation of institutions as well as technical capabilities in adapting the methods and practices of primary production, processing and external trade. Partnership cooperation and EU programmes should create the conditions for diversifying agricultural cooperation and improving trade conditions.

5.6 Particular subjects have been designated as development objectives for the EU and the partnership countries, which have proven to be crucial in the bilateral negotiations. The themes and subjects of these areas are known as flagship initiatives. Since difficulty in meeting the regulations and standards set out in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) has been identified as a bottleneck in the trade of foodstuffs, this subject should be included in the flagship initiatives.

6. Taking account of environmental factors and the social impact

6.1 Agricultural production and the food industry have a significant impact on the local environment. The choice of cultivation methods affects the quality of the soil and surface and ground water in particular. It is in the shared interest of the EU and partnership countries to prevent the damaging environmental effects of fertilisers and pesticides, in both soil and water systems. Ensuring the nutrient cycle is also an important development objective.

6.2 What happens in global energy markets and in the energy management of each country is an important factor in the development and success of agricultural production. Yields depend on the availability and price of inputs requiring energy, such as fertilisers. At the same time, production of renewable energy has an impact on food prices, because some bio-energy can be produced in farming areas. Bilateral cooperation between the EU and the partnership countries on energy matters is therefore very important for agricultural development as well.

6.3 In interaction between the European Union and the partnership countries, consideration should be given to the role of the agricultural sector in developing rural areas in the partnership countries. Without favourable regional development, poverty differences among the various regions will reach critical levels.

6.4 A key element of human rights is the observance of the fundamental labour rights adopted by the International Labour Organization (ILO). It is important that these adopted labour standards are adhered to in the free trade area between the EU and the partnership countries.

7. Development of administrative and other forms of cooperation

7.1 Implementing the Eastern Partnership, the association agreements, the deep and comprehensive free trade area and other forms of cooperation requires considerable interaction and cooperation among political decision-makers, authorities and experts as well as international organisations, not to mention socio-economic and civil society organisations. This should be taken into account in the implementation of the Eastern Partnership programme.

7.2 Interaction between EU and partner countries' citizens, in particular young people, needs to be recognised as a promoter of change. The EU has recognised the value of cultural cooperation and inter-cultural dialogue as an integral part of external policies (15).

7.3 Cooperation can be developed especially in the area of training and in research where joint research projects, visits and seminars are important in the development of mutual understanding and operational models.

8. The role and position of organisations must be strengthened

8.1 Particular attention should be paid to the involvement of civil society organisations in cooperation between the EU and the partnership countries. The EESC proposes support for the further development of the activities of civil society organisations and for strengthening the Eastern Partnership Civil Society Forum.

8.2 The role and status of civil society in the Eastern Partnership countries have been weak. In order to develop democracy, it is essential that the role of free organisations be strengthened. The EESC has already drawn up opinions on strengthening and supporting the role of organisations and civil society in the countries in question. The Committee drew up an opinion (16) on the subject under the Czech presidency in spring 2009.

8.3 Participation of civil society has been far too limited and badly organised. One key element of the Eastern Partnership policy must be the guidance and support of a wide range of organisations so that organisations are able to provide significant added value in improving and enhancing cooperation between the EU and the partnership countries.

8.4 The position and capacity of organisations in the agricultural sector are also relatively weak. In order to develop the industry and strengthen EU cooperation, agricultural sector organisations must be developed by improving training and promoting skills, both nationally and in connection with maintaining EU ties and implementing the Eastern Partnership.

8.5 In order to promote the Eastern Partnership programme, agricultural and food sector organisations must play a significantly broader role in the various stages of the process. The complexity of the food supply chain creates additional challenges both for workers, industry, research, guidance and management and for producers. Supporting the activities of all parties and boosting the capacities of organisations are basic conditions for ensuring that agricultural cooperation between the partnership countries and the EU can produce sustainable results which are beneficial to both sides. It is vital that joint activities be stepped up among the EESC, EU-level organisations and national organisations.

Brussels, 14 July 2011. The President of the European Economic and Social Committee Staffan NILSSON

(1) The Eastern partners are the countries of Eastern Europe and the South Caucasus covered by the European Neighbourhood Policy: Armenia, Azerbaijan, Georgia, Moldova, Ukraine and Belarus. COM(2008) 823 final: Communication from the Commission to the European Parliament and the Council: Eastern Partnership.

(2) Council of the European Union: Declaration of the European Council on the Eastern Partnership, Brussels, 20 March 2009, 7880/09, CONCL 1.

(3) DCFTA – Deep and Comprehensive Free Trade Area.

(4) Alexander Duleba & Vladimir Bilčik: Toward a Strategic Regional Framework for the EU Eastern Policy, Searching for Synergies between the Eastern Partnership and the Partnership for Modernization with Russia, Bratislava 2010.

(5) Council of the European Union: Presidency conclusions, Brussels European Council, 19/20 March 2009, 7880/09, CONCL 1.

(6) The flagship initiatives are as follows (http:// www.eeas.europa.eu/eastern/initiatives/index_en.htm):

a) Integrated Border Management Programme

b) Small and Medium-size Enterprise (SME) Flagship Initiative

c) Regional energy markets and energy efficiency

d) Prevention of, preparedness for, and response to natural and man-made disasters

e) Flagship initiative to promote good environmental governance

f) Diversification of energy supply; the Southern Corridor.

(7) Implementation of the Eastern Partnership: Report to the meeting of Foreign Affairs Ministers, 13 December 2010.

(8) EU: DG TRADE: Statistics.

(9) European Commission: trade, bilateral relations, countries, Belarus.

(10) See footnote 6.

(11) 4th Joint Progress Report: Negotiations on the EU-Ukraine Association Agreement, Kiev, 4-8 November 2010.

(12) European Commission, External Relations Directorate General, European Neighbourhood Policy; Vademecum on Financing in the Frame of the Eastern Partnership, 24 September 2010.

(13) EAP Community, www.easternpartnership.org.

(14) European Commission – DG RELEX: list of priority areas for the EU-Ukraine Association Programme in 2010.

(15) See footnote 2.

(16) O.J. C 277 of 17.11.2009, p. 30-36‘Involvement of civil society in the Eastern Partnership’.