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Closed: On 3 March 2006, Ukraine shut its border to exports from Pridnestrovie unless Moldova had approved them firstTIRASPOL (Tiraspol Times) - It was launched as a stealth move that would give Moldova the upper hand in status settlement negotiations with its "renegade Transnistria region" (officially called Pridnestrovie, and a de facto independent country which declared independence a whole year before Moldova willed itself into existence).
In a joint Moldovan-Ukrainian action, coordinated by Moldova in secret talks with Kiev's outgoing "Orange" parliament and then-Foreign Minister (now fired) Borys Tarasyuk, a plan to strangle the economy of Pridnestrovie was developed. Key to the plan: Disregard the 1997 agreement giving Pridnestrovie the right to free and independent foreign trade, and don't allow any exports to cross the border unless approved in advance by Moldova and accompanied with paperwork stamped by Moldova's authorities.
In government ministries in Chisinau, hopes were high as the plan was circulated confidentially from minister to minister with a 'Secret'-stamp on its cover.
The original idea came from Romania. In September 2005, a "roadmap for dominance over Transnistria" was published in Bucharest. The policy paper of the Romanian Academic Society (SAR) suggested that Moldova prior to a re-intensifying of the negotiations, Tiraspol must be "isolated by an international embargo."
Both Romania and Moldova believed that this would force Pridnestrovie to its knees, not just economically but politically as well.
On page 54 of a Moldova's 2005 "Common Country Assessment", submitted to the United Nations, Moldova wrote that it wanted "a common Moldovan-Ukrainian border and customs control" and that this would "create the premises for a favorable settlement of the Transnistrian conflict."
- The right to free trade
The plan went into effect late on a Friday afternoon, 3 March 2006, and it took Pridnestrovie completely by surprise: Moldova was silent, having abandoned the status negotiations earlier that same week under a pretext. And formal notification from Ukraine only arrived almost a whole week later.
Since 1997, settlement negotiations under the auspices of the Organization for Security and Co-operation in Europe (OSCE) have been based on the premise that better relations between Moldova and Pridnestrovie are desirable, and that the restrictions on trade flows must be removed. But instead of creating better relations and removing trade restrictions, Moldova decided to do the exact opposite.
As a key part of the 1997 Primakov agreement signed between Moldova and Pridnestrovie, the latter got the right to conduct independent foreign trade. It used this right to establish its own customs organization and customs stamps which were accepted as valid both by the other parties to the agreement and, indeed, by other countries in the world not parties to the agreement. Upon its subsequent entry into the World Trade Organization, Moldova submitted to WTO the 1997 Primakov Memorandum as documentation that the issue of Pridnestrovie was resolved, trade-wise.
For nearly nine years, from May 1997 to March 2006, the guarantor countries to the agreement - Ukraine and Russia - interpreted the formulation of the right to independent foreign trade as meaning that Pridnestrovie could determine its customs regulations independently of Moldova, processing import and export cargoes in accordance with the laws and regulations of Pridnestrovie. Subsequent Ukraine administrations consistently treated Pridnestrovie as an entity with the right to conduct independent foreign trade; accepting its customs documents and processing them in accordance to the customs regulations of Ukraine as applying to any other normal, routine import and export cargoes.
- Bad plan, with an even worse outcome
The Ukraine-Pridnestrovie border customs conflict began March 3, 2006, when Ukraine imposed new customs regulations on its border with Pridnestrovie; banning the import of cargo with documents cleared by Pridnestrovie’s customs and demanding instead also additional clearance by Moldova.
The move was decried as an economic blockade by the PMR government. A quick look in the dictionary for a definition of the word "blockade" seems to confirm that Pridnestrovie was not exaggerating:
Blockade: 1. The act of halting the movement of goods into or out of a country or area for the purpose of coercion, capitulation, or economic loss. 2. The prevention by government of goods from entering or leaving a country or area.
With the measure, Moldova and Ukraine wrecked the settlement talks and significantly worsened the chances for peaceful, constructive change involving Pridnestrovie.
Igor Smirnov is still willing to talk to Moldova, but the customs situation has changed what the two sides will need to talk about. Now, the priority is simply to negotiate normal, peaceful relations with Moldova, he says:
" - Today dialogue with Moldova must concentrate on the normalization of our relations," Igor Smirnov told Itar-Tass.
" - Pridnestrovie is a small, self-reliant, resilient nation, but all kinds of provocations and economic blockades, and constant outside pressure on the republic obviously hinder economic development and adversely affect the lives of people here."
On this, even the opposition agrees. Yevgeny Shevchuk, head of the Renewal party, said this to a Ukrainian TV station:
" - The actions taken by the Ukrainian government in 2006 resulted in economic and social crisis in Pridnestrovie, and this will be hard to be resolve even over the next 3 to 5 years. Capital investments have been cut in half. This would be a serious problem for any country, and even more so for an unrecognized country forced to function in difficult conditions."
" - The customs procedure is still the same. Pridnestrovie still suffers economic losses, Pridnestrovian companies are forced to carry out their exports through the Republic of Moldova and it causes double losses to the economy of Pridnestrovie. We have been living in difficult economic conditions for a long time already. I’d like to note that the Pridnestrovians’ attitude towards Ukraine is rather complicated in this situation, because Ukraine is a guarantor country and first of all, a neighbour," said Shevchuk.
" - Ukraine has historic ties with Pridnestrovie; and lots of citizens here don’t understand Ukraine’s stance towards Pridnestrovie," continued Shevchuk, himself an ethnic Ukrainian born in Rybnitsa, in Pridnestrovie. "Regardless of circumstances, we have to provide an efficiently functioning economy, and protect socially vulnerable sectors of society. Unfortunately, Ukraine didn’t offer us any support, but I hope that this is simply due to Ukraine's own political and economic difficulties."
Anyone who thought that the customs measures would bring Pridnestrovie to its knees, or provoke internal change, is either completely unaware of how Pridnestrovie perceives itself vis-à-vis its two larger neighbors and the near abroad as a whole, or has not bothered to study those parts of history where trade measures have been used for diplomatic aims.
- Tiraspol OK, but egg on Chisinau's face
In what may sound like a paradox, of the three parties in the customs dispute, small, landlocked and unrecognized Pridnestrovie actually holds the best cards.
What the economic measures are costing Pridnestrovie in lost tax revenue is more than offset by gains in long term political capital. Internally, the government’s pursuit of independence has been justified to the point where an overwhelming majority even of ethnic Moldovans on the left bank of the Dniester are now convinced that there is no viable future in a closer relationship with Chisinau. Externally, the suddenness of the reversal of a nine year privilege of free trade (without revocation of the document which originally granted this) also speaks to Pridnestrovie’s favor.
International legal precedents overwhelmingly favor Pridnestrovie, not Moldova or Ukraine, as does a detailed analysis of trade history. Learning from an ample supply of similar cases, both in the post-Soviet space and elsewhere in the world, it is clear – to those in Pridnestrovie and to analysts elsewhere – that economic measures such as those undertaken 3 March 2006 by Ukraine and Moldova will inevitably result in failure. In the meantime, the most extreme positions of radicals on both sides of the Dniester are strengthened, further undermining any hopes of a negotiated, non-violent outcome.
Pridnestrovie also knows that Moldova has played its strongest card. From now on, an escalation of laws and resolutions from parliament can be expected, but no Kosovo-style international initiative is feasible simply because tiny, landlocked Pridnestrovie never posed even the remotest geopolitical threat to Moldova or Ukraine, let alone to the U.S. or the European Union.
If that was true before, it is both true and documented today: Allegations of terrorism, illegal arms smuggling, or drug trafficking can no longer credibly survive even the most cursory study. After more than a year of official status reports by the European Union’s Border Assistance Mission, and a year of control measures on all exports by both Moldova and Ukraine, OSCE and others in the international community can now authoritatively certify that Pridnestrovie is not engaged in any illegal trade. The worst transgression reported by EUBAM in fifteen months of border monitoring was an inordinate amount of frozen chicken meat for re-export, utilizing customs arbitrage to take advantage of the lack of tariff harmonization stemming from the inability of the parties to come to terms.
While the current customs regime remains in place, Pridnestrovie is learning what works and what doesn’t from the past experiences of other unrecognized or embargoed states. History is unambiguously clear that measures of this nature are the absolute worst possible remedy to resolving territorial claims, and Pridnestrovie knows that as long as they remain in place, history remains on its side. Only in monetary terms do the measures affect Pridnestrovie, although this is offset by a flexible approach of its businesses and by extraordinarily generous support both from some foreign states and from humanitarian aid NGOs. Politically, the bluntness of the measures and their one-sidedness have given Pridnestrovie the opening it needed to pursue other avenues unilaterally; leaving Moldova and Ukraine with a nearly irreparably lessened influence in the region and fewer options for pursuing their policy aims.
Pridnestrovie wants the measures lifted, but any initiative to end them must come from a realistic, cold-shower reassessment of the goals which Moldova or Ukraine claim that they aim to achieve.
There are no legal justifications under international law for the customs measures imposed by Ukraine on cargo originating in Pridnestrovie. Other unrecognized states, and even many substate entities the world over are carrying out their own trade, legally, every single day. For almost nine years, this was true of Pridnestrovie as well. Only a badly thought out "plan" changed that. Failure to remedy this will harden the situation and move the two sides even further apart. This, in turn, almost guarantees that the conflict between Moldova and Pridnestrovie will not have a negotiated end.
See also:
» Losses mount as firms resist Chisinau's "registration trap" [1]
» Victim of blockade, PMR's largest company forced to cut output almost 40% [2]
» Referendum is reaction to blockade of Pridnestrovie [3]
Opinion and commentary:
» Why the customs blockade won't work [4]