Publication: Monitor Volume: 8 Issue: 106

Nearly a week of potentially historic East-West summitry came to an end on May 29 when President Vladimir Putin hosted a Kremlin meeting with a European Union delegation led by Spanish Prime Minister Jose Maria Aznar, whose country currently holds the EU rotating presidency, and Romano Prodi, president of the European Commission. The biannual EU-Russian summit followed by one day the landmark NATO-Russia summit that took place near Rome on May 28 and came only a few days after Putin hosted U.S. President George W. Bush for three days of summit talks in Moscow and St. Petersburg.

The EU-Russia meeting was almost anticlimactic by comparison, with nothing on the discussion agenda to compare either with the strategic arms control treaty signed by Bush and Putin on May 24 or the NATO-Russia cooperation accord that was finalized in Italy a few days later. And, indeed, the atmosphere at the Russia-EU summit was reported to be considerably different from that which had prevailed at the two earlier summits. Whereas the first two were marked by bonhomie and the sense that an historic gateway might be opening up for Russia to enter into a more harmonious relationship with the Western world, the EU-Russian summit was a tenser affair dominated in part by ongoing acrimony over the status of Kaliningrad, Russia’s poverty-stricken enclave in the Baltic.

The EU-Russian summit did nonetheless produce one important and, to many, unexpected result: an EU announcement that Brussels is prepared to recognize Russia as a market economy. According to some reports, the announcement stunned Russian officials present at the Kremlin meeting, and ended what had been a tense affair on a more upbeat note. The EU announcement also provided a welcome contrast–from Moscow’s perspective at least–with developments in this same area at last week’s Russian-U.S. talks. Putin had hoped the summit meeting with the U.S. president would bring a commitment from Washington to recognize Russia as a market economy. But despite the convivial atmosphere that prevailed during Bush’s visit, the best that the U.S. side could do was offer assurances that the U.S. Commerce Department will announce its own decision on the matter on June 14. Winning Western recognition of Russia as a market economy is critically important to the Kremlin because it will ease a host of trade-related restrictions and, most important, will boost Russia’s chances of winning entry into the World Trade Organization.

Prodi announced the EU decision, telling summit participants that “As Russia’s principal trading partner, it is right and proper that we be the first to recognize the considerable efforts undertaken by this country [Russia] in recent years by treating her as a fully-fledged market economy.” Officials in Brussels spoke in even loftier terms, telling reporters that the granting of market status to Russia would be an act “heavy with political symbolism” and constitute “one more step towards eliminating the economic vestiges of the Cold War.” Analysts said that the move would help Russian exporters by relaxing EU antidumping measures currently aimed at Moscow and by allowing tariff-free sales of a broader range of Russian goods in Europe. Aznar, for his part, pledged later on May 29 that the EU would also “take steps” to support Russia in its seven-year-long bid to join the WTO.

The EU announcement in Moscow, does not, however, mean that recognition of Moscow as a market economy will be automatic. EU officials reportedly warned that recognition would not be granted until Moscow gives firm pledges to liberalize its own energy sector, including the elimination of massive subsidies that currently keep domestic energy prices in Russia low. Putin likewise observed at the summit’s conclusion that Prodi’s pronouncement still needed to be formalized in concrete documents (AP, Reuters, May 29; Washington Post, The Guardian, AFP, RFERL, DPA, May 30).

The EU summit appears to complete what in some ways has been a remarkable realignment of the geopolitical landscape since the September 11 attacks on the United States. At the midway point of last year, relations between Russia and the United States remained tense, a product of deep disagreements on such key issues as missile defense and NATO enlargement. At the same time, there was a sense that the Bush administration’s perceived unilateralism and its attacks on the 1972 Anti-Ballistic Missile Treaty in particular were leading to a common rejection of U.S. policies by Russia and Europe while simultaneously driving Moscow into Beijing’s arms.

An easing of tensions between Russia and the United States began with Bush and Putin’s first formal summit talks, in Slovenia last June. The real breakthrough, however, seems to have followed the events of September 11 and Putin’s decision to enlist in the U.S. antiterror war. Some eight-and-a-half months later Russian-U.S. relations are friendlier than they have been since the early 1990s, and Moscow now has a formerly unimaginable formal role in the policy deliberations of the NATO alliance. Russia has simultaneously distanced itself from Beijing, not only by aligning with the United States but also by tilting strongly toward India, China’s main regional rival. Relations between Washington and its long-time allies in Western Europe, meanwhile, have grown testy. And Russia’s own ties to the EU–though still on an upward trajectory–have become ambivalent enough that some in Europe are warning of a new Russian-U.S. axis aimed against Europe.

Whether geopolitical developments will continue along these same lines is difficult to say, however. There remain numerous real and potential points of friction between Moscow and Washington, and, more generally, major developments in any of the world’s current trouble spots could quickly reshuffle today’s emerging diplomatic alignments. The most obvious trigger points are South Asia, the Middle East and Iraq. If not properly managed, a decision by the United States to launch military action aimed at toppling Saddam Hussein, for example, could poison the Russian-U.S. relationship and might unite Europe, Russia and China in opposition to U.S. policy. Mounting tensions between India and Pakistan constitute an even bigger potential threat to the emerging international order; all bets would be off in the event of a shooting war between those two nuclear armed states.