Where Europe overflows: Russia as a colonial power

By Anna Woudstra Pardoen

One often tends to forget that Russia, in whatever iteration of its existence it was in, has been a colonial empire. Whereas other colonial powers journeyed overseas to find, claim and exploit new lands and territories, Russia expanded over land, northwards into the lands of the Finnic and Sami peoples, eastwards and southwards into the Khanates of Central Asia, and westwards into Eastern Europe. Then further southwards into the Northern Caucasus, and eventually ever further eastwards, colonising Siberia, the Russian Far East, ending in Alaska on the American continent.

Not all lands that were conquered by Russia have remained Russian. Famous is Russia’s disappearance from the American continent following the 1867 Alaska purchase. Here, Alaska was bought from Russia by the United States of America, therewith not taking into account the presence and wishes of its local native peoples – nothing unusual for the time. Later Russia lost its sovereignty over Finland following the 1917 revolutions, and would lose many of its satellite states and dependencies in Eastern Europe and Central Asia following the collapse of the Soviet Union.

Nowadays, Russia is left with “just” two regions that could arguably be seen as colonies: the North Caucasus, and trans-Uralic Russia. Unlike analogous colonies of other European powers – the United States from Britain, Indonesia from the Netherlands, Algeria from France – these colonies have not seceded from their colonial overlord. In order to understand why, we have to consider what these colonies mean to Russia, and remember one important factor: without these colonies, Russia would lose most of its power.

Siberia, settled along the Trans-Siberian Railway by Russians in lands historically and currently native to various Turkic, Mongolic, Tungusic and Ainu peoples, is Russia’s economic powerhouse. Home to only a fifth of its population yet covering close to four-fifths of its territory, Siberia and the Far East produce around 70% of Russia’s oil and gas. The North Caucasus, not overwhelmingly settled by Russians and home to a mix of small native ethnic groups, though itself producing only 1.1% of Russia’s oil and gas, lies close to the Volga-Ural Oil and Gas Province, providing nearly 23% of Russia’s production. Russia needs these natural resources to maintain its position of power in Europe, and needs the territory to maintain its geostrategic and geopolitical dominance over well over a tenth of the world’s landmass. Without these colonies, the political centre of Russia with its loci around Moscow and Saint Petersburg, would have no geographical defences and no world-dominating amounts of natural resources – it would be, with the greatest of respect to Belarus, just another Belarus.

Russia’s dominance over these regions, however, is slowly dwindling. Whilst insurgency in the North Caucasus against Russian domination has been present essentially ever since Russia conquered the explosive and ethnically diverse region in the 18th and 19th centuries, Siberia is also now rearing its head. Natalia Kurnaeva, a Russian vlogger from the Far East, summed it up best in her video on Vladivostok: all profits made from the region flow to Moscow, and barely any of it is reinvested in the region.

Looking at Siberia, some will see the analogy to the socioeconomic situation in the British colonies in North America that eventually led to the creation of the United States. The North Caucasus, meanwhile, could be seen as analogous to the African fight for decolonisation in the second half of the 20th century. But whether these colonies will ever actually secede from Russia remains to be seen.

The Kremlin maintains a strong grip on Siberia, and so do the Moscow-based corporations that exploit most of the natural resources of the region. Insurgencies in the North Caucasus have been consistently put down by the Russian military, and the Caucasus mountains used as a geographical advantage in projecting its influence over Transcaucasia, as it did during the 2008 Russo-Georgian War. Moscow would not want to lose its economic and geostrategic assets.

For now, Siberia seems unable to secede, and Moscow has cracked down on the North Caucasus. For the foreseeable future, these two colonies are likely to remain Russian. But with trans-Uralic discontent and an ever-present conflict brewing in Ciscaucasia, with Chinese inroads being made into Siberia, the long-term future of Russia is increasingly uncertain. Should these colonies secede, Russia collapses, and one of the four major powers in today’s multipolar world will have fallen. A process which may take decades, but is not unlikely to occur during our lifetimes. With all the consequences to the global balance of power that come with it.

EU-Mercosur Agreement: a shift in the EU’s mindset?

By Ilaria Sacco

In the last days of the Juncker Commission (June 2019), the EU and the Mercosur (the Common market of the South formed by Argentina, Brazil, Paraguay and Uruguay) reached an “agreement in principle” on the trade pillar (the so-called Free Trade Agreement, or FTA). The FTA would save over €4 billion worth of duties per year, making it the largest trade agreement the EU has ever concluded. After 20 years of negotiations, it is now in the translation and legal review phase. But when or whether this agreement will enter into force is very unclear.

The “after 2019”: a greener Union
2019 was a fundamental year in the EU as changes in the political balance have permitted the environmental issue to impose itself at the heart of the political agenda. After the 2019 Elections, Agata Gostyńska-Jakubowska, senior research fellow at the Centre for European Reform think tank, argued that “Greens could be kingmakers in the decision process”; Camino Mortera-Martinez, analyst at the Centre for European Reform, stated that “it’s now clear the Greens will have a very important role in policymaking”. This represents a turning point for the Greens, as they have also become more influential in crucial member states, such as Germany and France. This led to the creation of a greener Commission, which unveils the Green Deal. At this point, some objections were raised in Brussels regarding the incompatibility of the Mercosur agreement with EU environmental goals shaped by the Green Deal and its implications for indigenous people.
Something has changed also in the public opinion: at the end of 2019, for the first time, EU citizens put climate change at the top of the priority list. An independent YouGov poll commissioned by SumOfus revealed that an overwhelming majority of EU citizens believe that the FTA with Mercosur should be rejected. As David Norton, trade campaigns coordinator at SumOfus, noted “Europeans don’t want cheaper beef at the cost of deforestation”. A study by the Amazon Geo-Referenced Socio-Environmental Information Network (RAISG) shows that from the turn of the millennium, an area of 513,016 square kilometers has been destroyed. Deforestation of the Amazon is used mainly to create grazing land for cattle, used by big landowner who produce for the European market. It is estimated that 80% of the destruction of the Amazon is linked to the beef sector, in which the EU is the leading trading partner. By ratifying an agreement that weakens controls, the EU risks becoming more and more complicit in the destruction of the Amazon. And while environmental issues were reaching the heart of the EU internal political agenda, incoherence became more and more unbearable at the external level. Thus, the mindset started shifting.

What happened with the FTA?
An inquiry by the European Ombudsman, Emily O’Reilly, followed by a complaint of five civil society organizations, stated that the European Commission should have concluded an updated sustainability impact assessment before the EU-Mercosur agreement was agreed. This event is occurring at a time when several member states have expressed reservations regarding its ratification. Germany, one of the member states that initially fully supported the deal, has now changed its mind; an independent report, commissioned by the French government, concludes that “the FTA is a missed opportunity for the EU to use its negotiating power to obtain solid guarantees that meet the environmental, health, and more generally societal expectations of its citizens”. For that reason, France states that it “will not vote on the text as it stands”; Austria’s coalition government has recently vetoed the FTA, as it goes against the Green Deal. On the other hand, Portugal, having close ties with South America, puts the FTA as a priority of its presidency while adding that it will search for clarifications on environmental standards. To conclude, 2019 represents a breakthrough. Changes in the political balance and public opinion, both greener, and the need to be a coherence actor, both internally and externally, have forced the EU’s mindset to change regarding the FTA. The Mercosur agreement is needed, but “as it stands” it could not be accepted in this new political equilibrium. The introduction of an environmental clause in the text could be the solution, but the EU is not close to cracking it. In medio stat virtus, but the balance between trade and environment is still very fragile.

The EU-China Comprehensive Agreement on Investments: What’s in it for China?

By Veronica Burgstaller

On 30 December 2020, the Comprehensive Agreement on Investments (CAI) was concluded in principle between the EU and China, marking the most ambitious agreement China has ever concluded with a third country and replacing the bilateral treaties it had previously with 26 EU member states (except Ireland). The agreement, after 7 years of negotiations, is a milestone in the bilateral relationship between the EU and China but clearly is unbalanced in the sense that it brings more benefits for the EU than for China. In essence, the CAI is an investment market access agreement that will expand market access and ensure competitiveness. It will provide a level-playing field for EU entities in China in addition to easing such restrictions as the condition of joint ventures activities with Chinese partners or the compulsory transfer of sensitive technology. On the other hand, the EU’s investment environment has long been relatively open. Although under CAI China will gain access to additional markets, that will help promote technological development, the main reasons for Beijing to push forward with the agreement are generally understood as being of geopolitical nature. For instance, the agreement will serve to legitimize the Chinese Communist Party (CCP) and  pre-empt policy coordination between the EU and the U.S

Though these points are not wrong, the CAI should be seen as a brick-stone of a broader and long-term Chinese policy strategy to achieve middle income status by 2035 and resolve the country’s internal domestic problems. Since its accession to WTO in 2001, China’s high growth has been driven predominantly by high levels of investment, mainly through domestic financing. Due to high export rates, followed by high domestic savings levels, China faced a problem of twin surpluses on both capital and current account. With an underdeveloped financial market, it cannot channel domestic savings into areas of investment. Also, its large foreign exchange reserves have led to protectionism and trade frictions with the EU and US. In order to overcome ‘a middle-income trap’, China has to implement reforms in the demand and supply side of the economy, meaning it has to encourage consumption, while at the same time increasing outward investment. The Belt-and-Road Initiative (BRI) for example enables China to redirect investment into infrastructure development projects. But inward investment is equally important because China can benefit from the expertise and know-how of foreign firms. Innovation would increase labor productivity and ultimately China wants to encourage the creation of its own original domestic products that are consumed by its citizens. 

In addition, high-level agreements may enable China to lock in domestic economic reforms. A recent study showed that trade agreements with strong political and economic partners put more pressure on domestic firms to comply with international standards and provide incentives for regulatory reform. The EU is currently the biggest global investor. Although the CAI may not be a trade agreement it is binding and ratcheting and also goes beyond investment-related provisions like clauses on sustainability and labor protection. 

Finally, the COVID-19 crisis, since the beginning of last year, had some unexpected and profound effects on global trade and investment flows. In the first quarter of 2020, China’s economy contracted with a growth rate of -6,8% and fixed-asset investment sank by 16%. Although most major firms in China returned to 90% of their working capacity within a period of two months, small firms are still lagging behind and consumption remains low. Inward foreign direct investment from the US and the EU continues to decline. More than ever, it is crucial for China to provide a more liberal and transparent investment environment. In line with such developments, China has issued a revision of its negative lists for foreign investors on June 23, 2020, that reduced the number of sectors in which domestic firms have preferential treatment from 151 in 2018 to now 123. Equally, the Foreign Investment Law promulgated in March 2019 had come into effect on January 1, 2020, unifying investment regulations and indicating further opening up of market access. The EU should understand that China’s foreign policy is mainly motivated by domestic concerns. From the 5th to 11th March, during the holding of the 4th session of the 13th National People’s Congress, Premier Li Keqiang outlined the 14th Five Year Plan that emphasises high-quality development with a focus on innovation, high-tech technology and the promotion of foreign trade and investments. Market liberalisation in China may have taken place incrementally, first in special economic zones that function as testing grounds, as seen in the case of  negative lists for foreign investors before being finally adopted nation-wide. In short, China has to balance policies that maintain the legitimacy of the party and has to retain its centralised grip, while also acting to liberalise its trade and investment environment. The CAI is an opportunity for China to achieve the objectives it set itself to become an innovative, middle-income country.

CETA Explained: A Triumph of Free Trade or a Setback for Europe

By Shane Goodman

On 30th October 2016, Canadian Prime Minister Justin Trudeau travelled to Brussels to sign the Comprehensive Economic and Trade Agreement (CETA) on behalf of his government. CETA is a free-trade deal between the European Union and Canada which its proponents claim will lead to job creation, economic growth and a reduction in red tape. However, critics of the agreement claim that it will lead to a weakening of European sovereignty and that it will have an extremely detrimental environmental impact. 

Bilateral negotiations between the EU and Canada began in October 2009 and were concluded after almost five years in August 2014. One aspect of CETA which has led to much confusion is its provisional application as of September 2017, following which 98% of the trade tariffs between Canada and the EU have already been removed. However, as CETA is a mixed agreement, the ‘trade’ aspects are dealt with separately to the ‘investment protection’ elements. Consequently, all EU Member States must first ratify the agreement for it to take full effect. Whilst all Member States have approved the text of the agreement for signature, only 16 Union members have ratified the trade deal. Among them are Spain, Portugal and the three Baltic. On the other hand, major European powers such as Germany and France have yet to ratify the agreement, although it has passed the French National Assembly in 2019 and is waiting on approval from the Senate. While most Member States are expected to pass the necessary legislation to enact CETA, the Cypriot government rejected the deal on 31st July 2020, which has presented a new hurdle for the deal to overcome. Citing the lack of a geographic indication for halloumi cheese as the most significant problem with the agreement, the concern in Cyprus over a possible weakening of European intellectual property rights has also been echoed by opposition parties in the Netherlands and Italy. Still, experts do not expect this to be fatal to the trade agreement and believe that this will at most lead to minor renegotiations around the issue of geographic indications of food products. 

Despite these problems, CETA can still count on the support of the Canadian and various European governments. For Canada and the EU, the trade agreement marks a substantial loosening of trade barriers and increased cooperation.The EU is the second-largest market for Canadian exports after the United States, with 21.4% of Canadian foreign direct investment (FDI) going to the European market. Conversely, Canada, while still a significant market for European exports accounted for only 2% of all European external trade in 2018.

However, the deal is not without its critics. Legal standing is de facto granted only to those with large amounts of capital, such as multinational corporations. Under the new corporate-focused multilateral investment tribunal, a European government, for example, would be likely to lose a case where they may attempt to put cigarettes in plain packaging if a Canadian corporation could prove that it caused them a competitive disadvantage. Indeed, the Canadian government themselves has lost cases concerning food safety and the banning of carcinogenic chemicals in petrol under similar provisions in the North American Free Trade Agreement (NAFTA).

Perhaps the area of most concern to critics of CETA is the potential of the deal having an extremely detrimental impact on the environment. Tar sands oil, such as that which would have been extracted through the Keystone pipeline had it been constructed, is one of the most damaging fossil fuels available for burning. Much of this oil is extracted in Alberta, Canada and while tar sands oil is rarely found in Europe, proposed legislation to ban its import into Europe was blocked by the Canadian government using CETA as a political bargaining chip. More than half of the cases brought before special tribunals similar to CETA’s multilateral investment tribunal have been concerning environmental regulations. Additionally, there is concern that the European Green Deal goals could be severely undermined by non-European corporations through CETA mechanisms. In fact, non-Canadian corporations such as those based in the US would also have standing in this system of legal redress so long as they have a Canadian subsidiary, something that is quite commonly held by large companies in the United States. This would be highly concerning to Member States with high levels of FDI from the US such as Ireland and Germany.

To conclude, CETA remains a divisive topic over ten years after negotiations commenced. While it cannot be denied that the free trade agreement will make exporting easier, one must consider if the impact to the integrity of the rule of law and the environment would truly make this agreement a wise investment into Europe’s future.

Portugal’s key position in European Defense Policy

By Mary karnachoritou

Back in 2000, the first foundation on Europe’s Defense and Security was put into place in the small Portuguese town of Feira under Portugal’s presidency of the council of the EU. The Feira agreement would constitute the basis for the European Security Strategy and later on for the large civilian and military mission under the CSDP umbrella. In June 2020 the German presidency introduced the “Strategic Compass” concept aiming to transform the EU into a more effective international actor. The “Strategic Compass” which is based mainly on the “Comprehensive Threat Assessment”, is a new concept, aiming to bring forth a new political direction by providing answers to political questions within the European defense cooperation sector. The main characteristic of this agenda is its general nature that entails less technical provisions, thus enabling the Member States to embrace it more easily. One of its biggest assets is that it allows a degree of further contextualization of the EU’s defensive future. In other words, the strategic compass works as a bridge connecting the Global Strategy 2016 and the CSDP creating a more efficient overview and control of the security situation in Europe and its implementation.

Once again crucial steps regarding the CSDP are made under Portugal’s Council Presidency, which is calling to initiate drastic structural changes in the defense and security policy ,hence it is considered a key player in the European arena. In a recent public speech, Portugal’s defense minister Joao Gomes Cravinho expressed the country’s priorities towards European foreign policy. In particular, Portugal hopes to reorientate the area of focus of European Defense Identity from land based to the maritime sphere as both Union’s trade interests but also threats stem from the sea. However, Portuguese government’s biggest concern is to introduce a political dialogue on two levels regarding defensive and security issues. The first level is among member states through information exchange and not just based on civilian missions but on a more permanent one. To be more specific, the main purpose is to bring forth a degree of political controversy through political discussions on the sensitive issues of defense and thus result in political contribution. The second level is among third countries which constitutes the major area of commitment of the EU such as the Sahel region, in which the EU is expecting to develop a permanent maritime presence of communication network.

Strategic autonomy is another challenge to be dealt under Portuguese presidency. Particularly, EU-NATO relationships are heading towards more tranquil and cooperative times. Under this atmosphere Portugal wishes to promote a model of EU projection abroad while keeping NATO in chief of defense. In order to succeed, European Defense Identity needs to become well established and deepen further among states. Portugal seeks to develop mechanisms that allow to tackle security problems per region while being in close interaction with its transatlantic partners. NATO is and will remain the cornerstone of the EU’s collective defense, but it is up to the Union to effectively handle the areas that matter the most for it. It is Portugal’s geostrategic position as a maritime state that constitutes it as the appropriate actor. Firstly, its proximity with the areas of interests and its relations with African states, and secondly its undoubtful Atlantic character that adds a level of credibility and insurance to the NATO partners. This combination provides the EU with an unprecedented diplomatic asset but at the same time requires a delicate diplomatic handling so as to preserve the fragile balance of the NATO partnership. All in all, Portugal by re-establishing the area of focus to the sea, is in position of reshaping the rules of the defensive game while showing a new path towards security integration. The central purpose is a strengthened CSDP with a civilian-military integrated mission supported strongly by the political factor. Will it be able however to correspond to such a huge task or the intergovernmental voices within the Union will gain ground and finally sabotage the shaping of a concrete strategic autonomy? Portugal’s presidency semester has just begun and the main question which rests to be answered is what kind of security and defense actor the EU wishes to become and how far it wishes to go.