Together with my colleagues Ambassador Philip Remler and Dr Alexandra Vasileva, I had the opportunity to present the final report of an OSCE Network Project that I led at the Economic and Environmental Committee of the OSCE on 13 December 2017 at the Hofburg Palace in Vienna, Austria. 

This report by the OSCE Network of Think Tanks and Academic Institutions focuses on “OSCE Confidence Building in the Economic and Environmental Dimension: Current Opportunities and Constraints”.

It would not have been possible for us to put this report together without the help of many individuals and organisations. Among them, thanks are due to the OSCE’s Austrian Chair-in-Office and the OSCE Secretariat for their participation, to the foreign ministries of Austria, Germany, Ireland, Serbia, Slovakia, and Switzerland, to the University of Birmingham, the UK Economic and Social Research Council, and to the Friedrich Ebert Foundation of Vienna for their financial and logistical support of our project; and, not least, to the authors whose background papers contributed to this report.

The current confrontation between Russia and the West will be with us for some time. The sides have mutually exclusive demands for ending the stand-off. In other crises of long duration – including the protracted conflicts with which we are all familiar – confidence building measures have been used to make sides feel more secure, establish a track record of negotiation and problem solving, and develop a cadre of people familiar with one another.

In our report, we have explored the use of confidence-building measures in the economic and environmental dimension. Although the current confrontation has some economic aspects in its expression, it is entirely political in its origins. Despite heightening security and human dimension tensions over the last decade, economic relations between the sides went relatively unpoliticised until the Ukraine crisis of 2013-2014. We have therefore looked to the second dimension to see whether there are confidence-building measures that can be applied in the current confrontation. In the current climate and with the benefit of past experience, we can think about three different types of CBMs in the EED.

  1. Direct and mutual actions taken by the Sides to reduce tensions and thereby increase confidence. This may involve, for example, regulatory transparency and harmonisation, as has been seen in the case of the extension of the DCFTA to include the Transdniestrian region of the Republic of Moldova or the Comprehensive and Enhanced Partnership Agreement between the EU and Armenia.
  2. Co-operation between the Sides to achieve a common goal or deal with a common challenge, such as climate change or the abuse of social media by transnational terrorist networks.
  3. The Sides could work together to assist third parties who would not normally cooperate because of a lack of trust or because of unresolved problems between them.

Examples of successful practice here include addressing environmental challenges across hostile borders, such as the joint efforts of Georgia, Russia, and Abkhazia in combating the Box Tree Moth and the Brown Marmorated Stink Bug, or the traditionally good co-operation between Moldova and Transdniestria on water management regarding the River Nistru/Dniestr.

Considering these examples of different types of CBMs in the EED, what potential options are there for future measures? Here we would propose three concrete areas of activity:

  1. Internet and more generally ICT governance as part of improving economic and trade infrastructure which in turn could lead to enhanced economic connectivity and could have confidence-building effects.
  2. There are clear needs and opportunities in the area of multilateral water management, for example in relation to the Araxes/Arax/Aras River and involving Turkey, Armenia, and Azerbaijan, as well as Iran.
  3. Finally, there is the issue of an EU-EEU dialogue to promote flexibility for the so called “states-in-between”, which would profit from increased connectivity to both the EU and the EEU.

The case of Armenia is exemplary: though in 2013 it did not sign an Association Agreement with the EU, and joined the EEU instead, in 2017 Armenia signed a Comprehensive and Enhanced Partnership Agreement (CEPA) with the EU. CEPA includes a set of substantial generalized tariff preferences, including elimination of tariffs on 66% of product lines and is compatible with the membership in the EEU. The fact that the EU was willing to negotiate a CEPA, and that Russia did not object to it, signifies some flexibility on the part of both. The OSCE could be a neutral platform for an EU-EEU dialogue focused on harmonization of standards and rules to promote the connectivity of the “states in between,” given its authoritative convening power and agenda-setting ability. This would be in line with the emphasis that has been placed on connectivity more generally by successive chairmanships.