Project title: EU - Moldova Trade Relations: Current Situation and Perspectives for Enhancement;

Implementation period: December 13, 2007 – December 14, 2008;

Funded by: Soros Foundation – Moldova, Good Governance Program;

Partner: Kiel Institute for the World Economy (Germany);

Project goal: The goal of this project was to aware Moldovan Government and society on the balance of risks and opportunities arising from the liberalization of trade with EU and to advise the Government on how to adopt balanced position for the future negotiations with the European Commission, so that an enhanced trade regime contributing to the economic modernization of the country and economic integration with EU is successfully implemented. The project aimed also to launch wider and more consistent public debates regarding the future EU-Moldova relations;

Main activities:

• Analyzed the past and current trade regimes between Moldova and EU and their economic impact;
• Assessed Moldova's general trade policy;
• Analyzed the options for legislative convergence of the Moldovan transports sector towards the EU standards;
• Rigorously screened the implementation of the economic part of the EU-Moldova Actions Plan;
• Adapted a standard CGE model for the Moldovan economy with the purpose of quantifying economy-wide effects of different trade liberalization scenarios;
• Identified elements of an optimal free trade agreement that would bring about maximal effects for the Moldovan economy and would contribute to the country's long-term economic growth and modernization;
• Wrote and disseminated policy studies;
• Advocated in bilateral meetings, roundtables and workshops with members of the Parliament and the Government for the proposed policy changes;
• Organized roundtables and conferences in Moldova (Chisinau) and EU (Brussels);

Main outputs and outcomes:

• Policy Study “EU-Moldova Actions Plan as litmus test for the Moldovan Government: screening the implementation of the economic part”, authors Valeriu Prohnițchi, Alex Oprunenco, Ana Popa, Oxana Lupan, Alexandru Gamanji, Adrian Lupuşor; presented and debated at roundtables organized on 15 of March (with national mass-media), 20 of March (local and regional mass-media), 25 of March 2007 (public officials);
• Policy Study “Evolution of the Moldovan exports to the EU: the role of the trade regimes”, authors Ana Popa, Valeriu Prohniţchi, Alex Oprunenco;
• Policy Study “Convergence of the Moldovan transport sectors to the EU standards”, author Eugen Hristev;
• Policy Study “Moldovan trade policy: export-import requirements in its trade with EU”, author Georgeta Mincu;
• Policy Study “A Free Trade Area between the Republic of Moldova and the European Union: Feasibility, Perspectives and Potential Impact”, authors Valeriu Prohniţchi, Ana Popa, Alex Oprunenco, Matthias Luecke, Mahmut Tekce, Eugen Hristev, Georgeta Mincu, Victoria Vasilescu;
• Roundtable and bilateral meetings organized in Brussels on 8-11 of March 2008 to present the project results with participation of Vaclav Navratil (Moldova desk officer – trade and economics, Unit Ukraine, Moldova, Belarus, Directorate General External Relations), Philippe Cuisson (Deputy Head of Unit, Europe (non-EU) and Central Asia , Directorate General Trade), Olaf Fergusson (Desk officer from the Economic Analysis unit), Manuel Catalan-Rodriguez (Desk Officer for Russia and the Newly Independent States (NIS), Neighborhood policy and EFTA unit, Directorate General Agriculture and Rural Development), H.E. Daniela Cujba (Ambassador of Republic of Moldova to the EU), Dennis Kredler (International Policy Relations Manager, European Roundtable of Industrialists), Michael Emerson (Senior Fellow, Center for European Policy Studies), Eoin O’Malley (adviser, International Relations Department, Business Europe) and Viorel Ursu (OSI Brussels, programs director);

Project impact:

The project has proven that the economic integration between Moldova and EU has to go beyond trade in order for Moldova to get meaningful trade gains, because the trade regimes that EU has offered Moldova unilaterally created an almost free economic zone, except trade with agricultural goods. Appropriate implementation of the EU sanitary and phytosanitary standards is a key challenge for the Republic of Moldova to be able to physically access the European market. The project has also advised the Government to give priority to the negotiations on the free circulation of the people, because Moldova should expect significant economic gains from the legalization of the illegal labor flows.