Preparing the implementation of the Deep and Comprehensive Free Trade Area (DCFTA) in the Transnistrian region of the Republic of Moldova

The Association Agreement, including a Deep and Comprehensive Free Trade Area (DCFTA) with the EU, is currently provisionally applied since 1 September 2014. At the same time, the EU Council decision of 7 October 2013 extended the EU Autonomous Trade Preferences (ATPs) to the Republic of Moldova until December 31, 2015.

Thus, one of the key issues to be properly addressed is the preparation for the implementation of the DCFTA in the Transnistrian region, considering that the ATPs will expire. In this context, herewith the author will try to outline in particular (1) the evolution of the dialogue with the Tiraspol authorities on the implementation of the Association Agreement; (2) the legal conditions and the minimum requirements for the DCFTA application in the Transnistrian region; (3) and finally the author will look into few scenarios concerning possible application or non-application of the Association Agreement in the region.

Both the EU and Moldovan authorities are most likely aware that ensuring a full application of the DCFTA in the Transnistrian region within the next months is a big challenge. In this situation, preparing the implementation of the DCFTA depends on the level of interaction between the Moldovan authorities and the EU authorities in Tiraspol. In this respect, the primary objective would be to identify a set of minimum requirements that would allow the de facto application of the DCFTA in the Transnistrian region in particular:

(1)  Removal of import tariffs on goods from the European Union that are now applied by the Transnistrian authorities;
(2)  Ensuring the certification of the origin of goods by the customs authorities of the Moldovan Transnistrian exporters;
(3)  Ensuring the respect of sanitary and phyto-sanitary standards for goods exported to the EU from the Transnistrian region.

Consequently, the process of implementation of the minimum requirements, harmonisation of non-tariff provisions and gradual transposition of relevant EU legislation should be included in an action plan with clear deadlines. To conclude, short-term task should be to identify with Tiraspol authorities a solution to exclude the import duties on goods imported from the EU. Ultimately, what should matter in the end is the economic interest of the businesses from the Transnistrian region. However, the main challenge in this regard is the political dimension of this process. At the moment the reality is that there are less than two months until the expiry of the ATPs, and the mechanism for implementing the DCFTA in Transnistria is still to be defined.