Sergiy Gerasymchuk, Regional Initiatives and Neighborhood Program Director at the Foreign Policy Council “Ukrainian Prism”
In recent years, relations between Ukraine and the Republic of Moldova had ambiguous dynamics. This was caused by tensions in the relations between the former President of Moldova I. Dodon and the Presidents of Ukraine P. Poroshenko and V. Zelensky. During the 2016 presidential campaign, I. Dodon declared his recognition of illegally occupied Crimea belonging to the Russian Federation, thus provoking some criticism from the Ukrainian part (Ambassador of Ukraine to Moldova I. Hnatyshyn was recalled to Kyiv for consultations). After I. Dodon was elected president, he had no further contacts with his Ukrainian counterpart P. Poroshenko. Moreover, I. Dodon continued with his controversial statements making bilateral relations even more complicated. For example, in 2017, while expressing his opinion on the future of separatist Transnistria, he named two options for it – either “to become a part of Ukraine or a part of the Republic of Moldova.” The President of Moldova was also among those who criticized Article 7 of the Law of Ukraine “On Education” (on the language of education).
- Dodon had only one telephone conversation with V. Zelensky, during which I. Dodon expressed his congratulations to the President of Ukraine on his election.
To some extent, the lack of contact at the presidential level was offset by intergovernmental cooperation. In particular, in 2017, the Prime Ministers of both countries and the President of Ukraine Petro Poroshenko met with the Prime Minister of the Republic of Moldova P. Filip. The meeting’s agenda included discussions on cooperation within the framework of the Eastern Partnership, ODER-GUAM, One Belt One Road initiative, infrastructure projects, and other bilateral relations aspects. Also in 2017, after a 6-year break, the Intergovernmental Ukrainian-Moldovan Joint Commission on Trade and Economic Cooperation resumed its work and two joint checkpoints were opened on the Ukraine-Moldova border.
In 2018, inter-parliamentary cooperation added a lot to the intergovernmental dimension of cooperation. In particular, they launched the Georgia-Moldova-Ukraine Inter-Parliamentary Assembly.
The Prime Minister of Moldova P. Filip also had official contacts with the President of Ukraine P. Poroshenko and the Prime Minister of Ukraine V. Groysman. Mr. Groysman paid a visit to Moldova to participate in the ODER-GUAM Summit of the Heads of Government.
It is also difficult to call the economic interaction between Ukraine and the Republic of Moldova unambiguous. On the one hand, the Moldovan market is considered promising for Ukrainian exporters: this is stated in the Export Strategy of Ukraine. In sectoral strategies, the main emphasis is put on increase in agro-industrial products supply.
However, it should be noted that, in 2016, Ukrainian exporters, trying to move away from the Russian market, paid more attention to Moldova, and then, contrary to the CIS Free Trade Agreement and WTO rules, Moldova introduced quotas for a customs-free supply of food products of animal origin and cement from Ukraine, and explained it by the need to protect local producers’ interests from the excessive competition caused by the influx of Ukrainian goods (due to the Russian embargo). The Ukrainian side also negatively assesses an environmental tax which Moldova introduced for imported products. In contrast, there is no proper control over such fee collection from local producers, and this creates unequal conditions for Ukrainian products compared to their counterparts produced in Moldova.
In 2019, the Interdepartmental Commission on International Trade (ICMT) of Ukraine decided to apply a 94.46% anti-dumping duty on cement clinkers imports into Ukraine and Portland cement from Moldova. Additionally, in January 2020, an anti-dumping duty was imposed for 5 years on imports of carbon and other alloy steels originating in the Republic of Moldova.
The main instrument of economic cooperation at the interstate level, called the Intergovernmental Ukrainian-Moldovan Joint Commission on Trade and Economic Cooperation, is partly ineffective. Among the reasons for such inefficiency we can name irregular commission meetings and long breaks between them (the latest commission meeting took place in 2017, and prior to that in 2011).
The factor of Transnistria, a separatist region not controlled by the Moldovan government, has a negative effect on bilateral economic cooperation. Smuggling flows through the Transnistrian section of the Ukrainian-Moldovan border are significant and create competitive advantages for illegal importers.
Current situation and scenarios for relationship development
The newly elected President of Moldova Mai Sandu’s visit to Ukraine (on January 12, 2021) created some preconditions for a new page in bilateral relations. This visit was M. Sandu’s first foreign visit and witnessed the thawing of bilateral contacts at the highest level.
Besides, M. Sandu unequivocally confirmed that she considers Crimea a part of Ukraine and also stated her support for the sovereignty and inviolability of Ukraine’s borders, thus removing this sensitive issue from both presidents’ dialogue agenda. Also, the President of Moldova stressed the need to achieve a strategic level of bilateral relations.
In their dialogue, the parties also discussed the “Transnistrian issue“. The presidents stressed the relevance of dialogue on the settlement of the Transnistrian conflict in the “5 + 2” format, which includes Moldova, Russia, Transnistria, the OSCE, and Ukraine, as well as the United States and the EU as observers. At the same time, both the Ukrainian and Moldovan parties believe that security, sovereignty, and integrity of the Republic of Moldova should be a priority issue of the settlement. This aspect is extremely important for Ukraine because during I. Dodon’s presidency, in Moldova, they discussed various scenarios, including a pro-Russian settlement, which could set some negative precedents for Ukraine.
The presidents also agreed to jointly combat smuggling, especially on the Transnistrian border. The Moldovan side sees ensuring the joint Ukrainian-Moldovan customs and border control in the Transnistrian region as one of the most effective methods of such a struggle. It seems that the Ukrainian side, despite its political readiness to take such a step, first seeks to resolve a number of other bilateral relations issues.
Among the priorities for bilateral relations outlined in early 2021, there are infrastructure and transit issues. In particular, to improve transport links between Ukraine and Moldova, the parties declared their readiness to create the Kyiv-Chisinau highway (Chisinau-Soroca-Yampil-Kyiv). However, Ukrainian experts have criticized the decision as the initiative creates a route competitive with the recently opened Orlivka-Isakca ferry crossing, which provides connections between Ukraine and Romania without “unnecessary” transit through Moldovan territory.
Separately, they also point out that traffic and passenger flows from Moldova are mostly moving in the direction of Odessa, and therefore, against the background of a general shortage of funds, creation of a new Kyiv-Chisinau highway may be inappropriate.
In the energy cooperation context, Ukraine and Moldova have an ambitious goal to develop and implement a joint action plan for the integration of their energy systems into the European network of transmission system operators ENTSO-E. Both countries face the challenge of reducing energy dependence on the Russian Federation. Moreover, if Ukraine integrates into this union on its own, Moldova may find itself in the situation of an “energy island”, when all its borders are surrounded by the European continental network ENTSO-E.
The parties also expressed their volition to resume electricity supplies to Moldova and its transit to Romania. However, the negative experience with previous cooperation in this area calls into question the likelihood of such plans implementation. In 2017, Moldova already tried to reduce its dependence on Russian electrical manufacturers’ supplies. On April 1, 2017, the Ukrainian company DTEK Trading and the Moldovan intermediary, the state-owned company Energocom, signed an annual contract for the electricity supply. DTEK Trading won the competition over its competitor, the Kuchurgan power plant, located in Transnistria and owned by the Russian company Inter RAO. However, in June 2017, the Ministry of Energy of Moldova decided to amend the contract and they had new negotiations, when Inter RAO offered a better price than the Ukrainian company.
The environmental issue remains problematic. The Moldovan side strongly opposes Ukrainian plans to build a cascade of hydropower plants on the Dniester River as they find them to pose an environmental challenge for the Republic of Moldova: lower water levels in the Dniester River can lead to a shortage of drinking water in Chisinau and wider areas.
Taking into account collective problems, negative cooperation experience, and lack of dialogue on strategic issues, the parties agreed to establish a Presidential Council. In addition, they also agreed to join forces in dialogue with the EU on vaccines supply.
However, the chances on bilateral priorities implementation appear only if, in addition to winning the presidential election, M. Sandu will be able to hold early parliamentary elections in Moldova and her political party “Action and Justice” will get results allowing her to form a government with the majority or with coalition partners.
At the moment, this scenario has significant obstacles. First, in the acting parliament, a situational union of political forces was formed, seeking to prevent early elections. It includes former President I. Dodon’s Party of Socialists of the Republic of Moldova (PSRM), the Șor Party, and the Pentru Moldova group. Secondly, the PSRM and the Șor Party have already adopted the controversial issue of protecting Russian minority rights; they will try to exploit the societal polarization issue in Moldova and have their chance for political revenge. Control over the new parliament will allow them to block Sandu’s initiatives. Thirdly, even if “Action and Justice” wins the election, there is a risk that to form a coalition it will have to cooperate with “Our Party” led by R. Usatîi, who has the reputation of an odious populist and is also able to hamper any reforms and initiatives declared by M Sandu. Fourthly, there is a possibility that an analogue of the Romanian parliamentary party “Alliance for the Unification of Romanians” (AUR) will be formed in Moldova, which will be a “conservative” formation and speculate on family, church, and national values to appeal to vulnerable populist voters, and this will form another challenge for M. Sandu (even if the AUR analogue in Moldova does not immediately become popular, they have a chance to become political allies of the PSRM and the Șor Party). Moreover, they will go for the center-right electoral field, despite the pro-European forces’ interests.
Thus, despite the current positive dynamics in bilateral relations between Ukraine and Moldova, it is too early to speak about this trend in the midterm.
The parliamentary election results will be of decisive importance, though even positive results for M. Sandu do not guarantee the implementation of her priorities, since “Action and Justice” will be forced to take into account its dubious partners and the volition of the opposition. Generally speaking, in the midterm, we can expect high turbulence and volatility of the Moldovan political system.
To Office of the President of Ukraine:
Given the effectiveness of presidential dialogue to launch the Presidential Council and make it efficient, several steps need to be taken. This structure should be strengthened with expert support with the involvement of relevant central government bodies and civil society capacities. The Presidential Council activities should be supported by the annual Ukraine-Moldova expert forums, a platform for discussing the bilateral relations’ problems and prospects (including, as the first such forum showed in 2019, security, environment, national minorities, and other sensitive issues).
To the Ministry of Foreign Affairs of Ukraine, the Ministry of Economic Development, Trade and Agriculture of Ukraine:
In the economic sphere, it is necessary to ensure the resumption of regular meetings of the Intergovernmental Ukrainian-Moldovan Joint Commission on Trade and Economic Cooperation to resolve disputed economic issues.
To the Ministry of Foreign Affairs of Ukraine, the Ministry of Energy of Ukraine:
In the energy cooperation sphere, it is necessary to intensify dialogue with both Chisinau and Bucharest on mechanisms for ensuring cooperation, provided that part of the transit routes pass through the territory of Transnistria, uncontrolled by the Government of the Republic of Moldova.
To the Verkhovna Rada of Ukraine:
As for the inter-parliamentary dimension, it is also worth strengthening, but not without taking into account the political situation in the Republic of Moldova. It would be reasonable to keep contacts with the acting parliament at the working level and distance from the PSRM as this political force pursues a policy unfriendly to Ukraine. At the same time, in the case of parliament renewal during the early elections, it would make sense to raise the issue of restoring the Georgia-Moldova-Ukraine Interparliamentary Assembly format.