European Union (Definition of Treaties) (Association Agreement) (Georgia) Order 2015

Baroness Anelay of St Johns Excerpts

Thursday 26th February 2015 Grand Committee

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[Baroness Anelay of St Johns]

That the Grand Committee do consider the European Union (Definition of Treaties) (Association Agreement) (Georgia) Order 2015.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

My Lords, I shall also speak to the EU definition of treaties association agreement orders for Moldova and Ukraine.

Today we are considering three draft orders that relate to association agreements between the European Union, the European Atomic Energy Community and their member states, and three countries: namely, Georgia, the Republic of Moldova and Ukraine. The purpose of these draft orders is to declare the agreements to be EU treaties, as defined under Section 1(3) of the European Communities Act 1972. The draft orders we debate today are a necessary step towards UK ratification of these agreements.

Georgia, Moldova and Ukraine have all chosen to pursue closer ties with the European Union. These countries have decided of their own free will to sign association agreements in order to support their own reform programmes and to seek closer political association and economic integration with the European Union. We fully support the sovereign choices of Georgia, Moldova and Ukraine and strongly believe that no third country should have a veto over their decisions.

These association agreements, with their deep and comprehensive free trade areas, are wide ranging. They provide strong mechanisms through which to deliver security, democracy and prosperity. They commit Georgia, Moldova and Ukraine to deep and meaningful reforms, to align more closely their legislation to EU norms, focusing on support to core reforms, including economic recovery and growth, good governance, improved respect for rule of law, and human rights. They will allow for the closer integration of Georgia, Moldova and Ukraine with the EU and will promote increased prosperity and stability in the European neighbourhood. That is not only in the interests of those three countries, but is clearly in the interest of the EU, including the United Kingdom.

The ratification of these three agreements is not an end in itself. They form part of a process to drive forward continuous reform in all three countries. The European Commission will prepare annual progress reports to reflect each country’s strengths and highlight areas for improvement. The scope and nature of the agreements are similar. That is why we are considering the draft orders together today. However, we should bear in mind that each country faces different pressures and has its own distinct priorities for its relationship with the EU.

The first order before us today, which I formally moved, relates to Georgia. Georgia has watched closely as events have unfolded in Ukraine. Both the Georgian Government and public have drawn parallels with the 2008 conflict with Russia. The Georgian Government are extremely concerned about the situation in Ukraine and its implications for their country, and have lobbied EU member states actively to ratify Georgia’s association agreement.

We remain clear, however, about the importance of Georgia continuing with reforms and fulfilling its commitments for signature of its agreement. Strengthened respect for democracy, human rights and the rule of law are part of the process of moving closer to the EU. While not without setbacks, Georgia’s progress in the areas of democratisation and economic reform over the last 10 years has been impressive. The agreement will further help to encourage Georgia to drive forward with genuine commitment and energy the reforms necessary for the country’s long-term security and prosperity.

The European path has widespread support across Georgian society and the country’s main political parties. Since Georgia’s parliamentary and presidential elections in 2012 and 2013, which witnessed the first peaceful transfer of power in Georgia—a rarity in the former Soviet space—the Georgian coalition Government have remained committed to and have continued on the pro-EU trajectory set by the previous Government.

The wider south Caucasus region is of strategic importance to the UK and the EU. Continued stability in this region is also essential for the UK’s prosperity and energy security goals. It is therefore strongly in our interests that Georgia continues along its EU path. Since the brief Russia-Georgia war in 2008, the EU has played an important role in conflict resolution through the EU special representative for the south Caucasus and EU monitoring mission that provides an effective monitoring presence along the administrative boundary lines between Georgia and its breakaway regions. Closer political association and greater economic integration into the EU is the most effective way to promote reform and modernisation in Georgia, as well as contributing to conflict resolution.

I turn to the order relating to Moldova. Moldova’s parliamentary elections of 30 November 2014 illustrate Moldova’s continued commitment to democracy. A new coalition Government were appointed by the Moldovan Parliament on 18 February. We hope that they will govern in an inclusive and accountable manner and make early progress with the implementation of Moldova’s association agreement. It will be important to maintain, even speed up, the progress that Moldova has made since 2009 in administrative reform, independence of the judiciary, combating discrimination, and ensuring that democratic processes and respect for human rights are more deeply embedded in Moldovan society and more able to resist pressure from destabilising outside forces.

The protracted conflict in Transnistria remains unresolved, largely because of the malign role of Russia. Despite attempts by the European institutions, EU member states and the Government of Moldova, the de facto authorities in Tiraspol refused to engage meaningfully in negotiations over the association agreement. Nevertheless, an increasing share—now more than half—of Transnistrian exports go to the EU. Many businesses in the Transnistria breakaway region have a strong interest in positive relations with Chisinau and the EU, and could provide a positive influence for change.

Before I progress to the order which relates to Ukraine, it may be for the convenience of the Committee if I update it on the latest situation there, before saying more about the Ukraine association agreement. This is not a debate about the situation in Ukraine, but I appreciate that this is a moving picture, and Ministers have a duty to inform the House.

As the Committee will know, an agreement on a ceasefire was reached in Minsk on 12 February. It includes provisions embodied in an original ceasefire agreement also agreed in Minsk in September 2014. These measures include the withdrawal of heavy weapons to agreed distances from the line of contact, and the withdrawal of all foreign armed formations, military equipment and mercenaries from the territory of Ukraine. The 12 February agreement also envisages fresh elections under Ukrainian law in the breakaway, separatist-held areas and for constitutional reform to bring a more decentralised system of government in Ukraine.

The Minsk agreements were endorsed by UN Security Council Resolution 2202 on 17 February. This underlines the need for all signatory parties to implement their obligations. This resolution will allow the Security Council to monitor that closely.

There must be a particular focus on ensuring that Russia and the separatists honour their commitments. In the weeks that preceded the Minsk agreement of 12 February, Russia stepped up military support to the separatists. It transferred heavy weaponry and maintains hundreds of regular soldiers, including special forces, in Ukraine. Even after the ceasefire came into effect on 15 February, separatist and Russian forces continued to mount attacks on Ukrainian positions, including in the town of Debaltseve, an important road and rail hub, which finally fell on 18 February.

The consequences of Russia’s actions in Ukraine have been devastating. Since fighting started, we have seen more than 5,000 dead, tens of thousands injured and more than 1.5 million people forced to take refuge elsewhere. It is Russia, through its support for the separatists, which is responsible for this and Russia which must be held to account. As the Prime Minister made clear at the European Council on 12 February, Europe must send a clear message to President Putin that until Russia changes its behaviour, sanctions will remain in place. Russia must recognise that Ukraine’s independence and territorial integrity should be respected and that Ukraine should be allowed to make its own sovereign decisions. The association agreement is just such a sovereign decision.

For Ukraine, the association agreement represents a very clear public commitment, by both the EU and Ukraine, to a deep relationship and close co-operation and to the continuation of much needed deep-rooted reforms. Although the provisional application of the deep and comprehensive free trade area has been postponed to 1 January 2016, the provisional application of important areas such as the rule of law and the fight against crime and corruption came into force on 1 November 2014.

The proposal to delay, at the request of President Poroshenko, the provisional application of the deep and comprehensive free trade area of the association agreement until 1 January 2016 was done in the spirit of peacebuilding, giving Ukraine and Russia time to discuss their economic relationship. The proposal offered a pragmatic solution to address Russia’s stated concerns about the deep and comprehensive free trade area, while leaving the text unchanged. In the mean time, the EU will continue the application of autonomous trade measures for the benefit of Ukraine until the end of 2015, granting Ukrainian exporters continued preferential access to EU markets without waiting for the trade provisions under the association agreement to enter into force.

These association agreements will be supported by continuing financial and technical support from the European Union on strengthening the rule of law, advancing judicial reforms, fighting corruption, ensuring respect for fundamental rights and freedoms, and strengthening democratic institutions. The EU provides funding to Ukraine, Georgia and Moldova under the European Neighbourhood Instrument. The Commission currently plans to allocate at the minimum €2.1 billion and, depending on the pace of reform, could allocate up to €2.6 billion to support Georgia, Moldova and Ukraine between 2014 and 2020. This is a significant increase on the previous period for all three countries.

In conclusion, we firmly believe that the implementation of the association agreements will bring mutual benefits to Georgia, Moldova and Ukraine, and to the EU. We should all be clear, however, that this will not happen overnight. It is a complex region—we have all noticed that and debated it. There are no easy solutions to the crisis in Ukraine. Georgia and Moldova both have protracted conflicts and disputed territories within their borders. The association agreements have the potential to have a positive impact in the region and on these conflicts as Georgia, Moldova and Ukraine become more economically successful and politically stable. But we, along with the EU and other partners, will need to stay closely involved to ensure that these agreements fulfil that potential and bring maximum benefits to the region, which is in all our interests. I commend the draft orders to the Committee and I beg to move.

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We cannot have a situation where Russia tries to exercise a veto over the actions of its neighbours, whoever they may be, or to threaten consequences similar to those that have been visited upon Ukraine. It is on that basis that we support these orders.

[Baroness Anelay of St Johns]

My Lords, I am grateful for the support that all noble Lords have given to this order and, I hope, by implication to the other two orders that have been debated with it. In particular, I echo the words of the noble Lord, Lord Bach, about the demonstration of experience and expertise by Peers, whether they be members of the Council of Europe or have served as Members of the European Parliament, or indeed have been long-term Members of this House and have participated in our Select Committee work. It is important that this House is able to demonstrate that sort of expertise.

It is important that we heard from the Opposition their strong support for this process whereby sovereign countries are able to make their own decisions about where their future may lie, and to do so in a constructive way. All those three countries need to pursue these objectives in a constructive manner. I agree with every single word uttered by the noble Lord, Lord Bach, today, and I will address the two questions that he posed.

The people of Georgia, Moldova and Ukraine have made a clear choice for a future closely aligned with the EU. I will tackle head-on the questions that were put about whether or not the EU botched, as my noble friend Lord Balfe put it—rather inelegantly, perhaps—the negotiations over the association agreement with Ukraine. It is not the EU that has caused this crisis. As the noble Lord, Lord Bach, pointed out, negotiations with Ukraine started as long ago as 2007 and Yanukovych was certainly part of them, with support from the Ukraine Government of which he was the head. It was really only when at the beginning of last year Russia woke up to the fact that the implications of this might be something that it did not like—as other noble Lords have pointed out, Russia appears to have the view that it still has the right to control countries that are in fact sovereign but which perhaps used to be within its remit—that Yanukovych seemed to take a different point of view and we entered into the period of Euromaidan and the demonstrations by the people of Ukraine, who said, “We want this association agreement. We want a closer association with the EU. That is where our future lies, and you as the leader of our Government should take notice of us”. It was his failure to take notice of the will of the people, of an elected Government, that meant that he fled the country and has not yet returned. Whether he seeks to return is a matter for him. I am not too sure quite what the Kiev Government would think of that but that is his decision.

Therefore, I am clear that Ukraine has taken a decision that is right for a sovereign Government to take and that the EU has taken a measured course. Indeed, in opening I made it clear that President Poroshenko has asked us to delay the implementation of the deep and comprehensive free trade areas specifically, so that negotiations can continue and so that Russia can become more accustomed to what the implications might be for it—to try to allay suspicions. Overall, with regard to Georgia and Moldova, I will say also that the ambition with their agreements is the same as that for Ukraine. They are aiming to deepen their political and economic relations with the EU and to integrate them gradually into the largest single market in the world.

Several noble Lords raised the question of integration with the EU: how, when, should they, or should they not? It is quite right, as my noble friend Lord Balfe said, that there was at one time a particularly large expansion in the number of accession countries to the EU. According to the EU treaties, any European state which respects the EU’s values and is committed to promoting them may apply to become a member of the Union—that is a matter of fact in the treaties. However, I say now, as I have said in the past, that the UK Government support the Eastern Partnership countries—at the moment, Armenia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine; we just referred to the association agreements with the latter three—as possible EU countries in the future. The stress is on “the future”, because, as other noble Lords have pointed out, it is important that those three countries meet the necessary criteria. Other noble Lords here have painted a picture of life in those countries that shows that they have a long way to go before they have an independent judiciary, human rights, and a way of tackling corruption, which they need before they can come into the category of accession countries. I am aware that there is no current consensus on the potential candidacy of those countries among the member states. However, it is right that those countries should be able to look at the European treaties and consider that they can work towards that. It is up to them whether they reach the standards, and up to the current members as to whether they will then welcome them into the EU.

The association agreements we have considered today are of course not ends in themselves—that is something that my noble friend Lady Ludford referred to and which I will come to in a moment. Much work needs to be done on domestic reforms across all three countries, and the EU is providing assistance on strengthening the rule of law, advancing judicial reforms, fighting corruption, ensuring respect for fundamental rights and freedoms, and strengthening democratic institutions. I can assure the noble Lord, Lord Bach, that we play a prominent role in that and will continue to do so. In opening I gave some information about the amount of money—significant sums of euros—that will be going to those countries to assist them in the future. We will have a role, certainly, in giving advice on the humanitarian issues through DfID. I will certainly contribute my views on human rights to many; for example, at the meeting of the Human Rights Council in Geneva next week. We will all as Ministers and officials play an important part in ensuring that those three countries are aware of and can work towards the standards they need to achieve if they are properly to implement the association agreements and ultimately work towards membership of the European Union if that is what their Governments continue to wish to do.

Therefore, all that will take time and money—I refer to questions from noble Lords and my noble friends with regard to that. One of the main points was put very clearly: that we must be sure that we have complementarity between the work of the European Union and that of the Council of Europe. My noble friend, whom I reappointed to the Council of Europe, is sitting here. One of the things that must impress us all is that when the delegations go to the Council of Europe, it is the Members of this House who keep it going, do the work and the chairing and who are the rapporteurs. I am certainly very proud of that.

I assure my noble friends Lord Balfe, Lady Ludford and Lord Dundee that there is a complementarity and not a crossover. As my noble friend Lady Ludford said, it is not a competition. It is important that there is no double-handling, as my noble friend Lord Dundee said, and that we do not want to reinvent the wheel. The association agreements can proceed constructively and do something that the Council of Europe cannot, which is important. They give hope of a closer political and economic future for these countries, which only the European Union can provide. That complementarity must be key to the successful progress of these countries when they apply the benefits, as I hope they will be, of these association agreements.

Looking forward again, both my noble friends Lord Bowness and Lord Balfe raised the issue of frozen conflicts—Georgia and Moldova, and now of course the question about what happens with the eastern areas of Ukraine. The three association agreements extend to all sovereign lands, even if one does not have control over parts of one’s sovereign territory. The agreements extend to areas of Georgia, Moldova and Ukraine that are currently outwith the effective control of the sovereign Governments of those three countries, although the provisions of the agreements will not of course in practice apply to those territories until such time as the Governments of Georgia, Moldova and Ukraine can secure compliance with their requirements.

The provisions for the deep and comprehensive free trade areas require the Governments of Georgia, Moldova and Ukraine to transpose and enforce EU standards in a number of sectors, including phytosanitary standards. That is important, otherwise trade will simply not be trusted by other partners. However, effective enforcement is not currently possible in the breakaway regions. Moldovan companies currently export to the EU using a system of autonomous trade preferences, to which Transnistrian companies also have access. The EU has extended the system of autonomous trade preferences to Moldova as a whole until the end of 2015, ensuring that those Transnistrian businesses will not immediately lose their current access to the single market. In answer to the question asked by my noble friend, the EU will need to reflect on how to handle this issue after the end of 2015. He raised a crucial point. At the same time, it should give the Transnistrians food for thought, given that over half of Transnistrian exports now go to the EU.

My noble friend Lady Ludford asked specifically about the procedural aspect, referring in particular to the Explanatory Memorandum, and which obligations are implemented and how. The European Communities Act 1972 provides the mechanism for implementing in UK law our obligations under an EU treaty, which is what the agreements become under these orders. That is the way in which the provisions of the agreement are given direct effect in UK law. Not every provision in the agreement would need to be the subject of legislation, but where we need legislation, which some parts may do, the order gives provision to that effect in UK law. This is about providing that kind of consistency.

My noble friend Lady Ludford also raised the important point about our view of the position of other EU member states with regard to sanctions and to the issue of Russian influence. EU member states have various degrees of economic and political interaction with Russia. We have seen that because of the energy aspect, let alone because of anything else. Despite this, the EU has developed a package of robust sanctions. As far as I am aware from the discussions that have been happening as recently as yesterday, the unanimity on that still holds and there is a determination about that. However, my noble friend is right to say that we need to be watchful and to show that the EU remains united. Russia needs to understand that, particularly before we reach the European Council on 20 March, when one would expect the current sanctions to be rolled over. If there are any breaches of the ceasefire, that would of course be taken into consideration and we should be ready for further sanctions at that point. The impact on Russia should be clear.