What about the Customs Union with Russia? Will Moldova be allowed to join if invited? Will it be compatible?

We have to make a distinction between an FTA and a Customs Union. Within any Customs Union, a country cedes its power to conduct its own trade policy to the joint body, starting with the management of import and export duties and the so-called Common External Tariff, covering also customs revenues and other elements. Additionally, in a deeper type of a customs union there could be an attempt to unify some (or all) aspects of regulatory regimes related to trade, such as sanitary or industrial regulations.

Whereas an FTA only regulates tariffs and the country retains its sovereignty over its tariff regime, a Customs Union causes a concern because the partner country is no longer solely in charge of its tariff policy and significant incompatibility could exist between the liberalisation of trade agreed in the FTA with the EU and the policy of the Customs Union. As regards the regulatory issues, it depends whether the regulations adopted at Customs Union level are compatible with the EU and/or international standards. Since coexistence of regulatory regimes within one jurisdiction is problematic, divergences in this area make any coexistence of the DCFTA with membership in the Customs Union incompatible.

Subject to further analysis, current framework and practice within the Customs Union should in principle be compatible with WTO rule-making (due to Russia’s membership) but in practice several gaps persist and the direction of reform is unclear and only partly based on EU standards.