The expansion of the European Union (EU) on May 1 that has aroused serious concerns from Russia is leading the development of Russia-EU relations into a new era, which is set to encounter numerous frictions but is also expected to see more coordination or cooperation.

Problems ahead

The EU will on Saturday officially admit 10 Eastern and Central European nations, mostly countries of the former Soviet-led bloc, pushing its clout eastward to the Russian borders.

Russia has been worried about the EU expansion, the largest of its kind in the bloc's history, which will impair not only Russia's economic interests but also its leading position within the Commonwealth of Independent States (CIS), its traditional sphere of influence.

It has been commonly estimated that Russia will suffer an economic lose of 150 million US dollars every year after the extending of the EU-Russia Partnership and Cooperation Agreement (PCA) to 10 new EU members, according to the Moscow Times daily.

The longstanding competition between the two sides over the control of energy resources in the Caspian Sea and Central Asia is destined to continue.

Russia is also worried that the enlarged EU will further interfere into its internal affairs, including its process of democratization and reform in the establishment of a market economy, the ratification of the Kyoto Protocol on global climate change and Russia's accession to the World Trade Organization (WTO).

Russia has been particularly concerned about the future transit of goods between its mainland and the Baltic enclave of Kaliningrad and the rights of residents who speak Russian in the three Baltic nations.

Possible compromises based on mutual needs

Although being jittered, Russia has shown a generally calm reaction to the EU expansion. The State Duma, or the lower house of parliament, which considered the event as an "important" period in the Europe integration process, on Thursday unanimously passed a statement pledging to strengthen ties with the EU.

"The State Duma confirms its commitment to further develop and strengthen mutually advantageous ties between Russia and the European Union and expresses its willingness to make every effort to intensify the harmonization of Russian and EU laws," the lawmakers said.

Both Russia and the EU hope to seek compromise in resolving disputes between them through dialogue and consultations taking into consideration of common interests.

Russia and the EU share similar strategic goals in international affairs. The EU, which aims to build a peaceful, prosperous, secure and united big Europe, vows to play a key role in the multi-polar world. Russia advocates establishing a multi-polar, equal and just international order. It is making utmost efforts to "integrate into Europe." Russian observers have pointed out that EU plans could not be implemented without Russia's participation while Russia's ambitious goal to integrate into Europe could not be realized without EU's backing.

The EU has become Russia's biggest trade partner with Russia's being the EU's fifth biggest one. After the EU's new round of enlargement, Russia's trade volume with the bloc will account for more than one half of its total trade volume. In the meantime, Russia is EU's main exporter of energy and EU has heavily invested in Russia's economy, so the rapid buildup of a market economy in Russia will be beneficial for the establishment of the "big Europe."

Russia and the EU share positions on the seriousness of threats such as terrorism and proliferation. They are also opposed to unilateralism.

"Russia and the EU could complement each other in security more than in any other areas," said Alexei Arbatov, head of an international security think tank at the Russian Academy of Sciences and a former deputy chairman of the State Duma's Defense Committee.

However, "the two sides have not advanced far in practical cooperation," he said.

Cooperation-oriented negotiations

Russia and the EU signed an agreement Tuesday on the expansion of the EU to Russia's western borders and to extend the PCA to 10 new EU members. Under it, the EU will drop customs duties on cargo shipments between mainland Russia and Russia's enclave Kaliningrad, lower trade tariffs, raise Russian steel quotas and honor existing contracts to supply Russian fuel to new members' nuclear power plants.

The Gazeta daily newspaper lauded the signing of this agreement in an editorial Thursday that the potential damage to Russian trade from the EU's expansion has now been halved from the commonly cited figure of 150 million US dollars per year. An agreement on the duty-free transit of goods to the enclave of Kaliningrad and various other trade concessions are "a big success for Russian negotiators."

The Kommersant daily newspaper went even further, linking the EU expansion to Russian hopes for WTO accession. "As compensation for being willing to talk, Brussels gave Moscow 16 export guarantees, and this is a sign of a softening EU position in regard to Russia's accession to the WTO."

German, French and Italian leaders have paid separate visits to Russia in April. The main goal of their working tours was to boost dialogue and cooperation between the EU and Russia.

In late April, Romano Prodi, president of the European Commission, which is the executive arm of the EU, also visited Russia to pave a smooth way for the upcoming EU enlargement. He and Russian President Vladimir Putin agreed to form a permanent council comprising EU commissioners and Russian ministers responsible for resolving disputes in their cooperation. All the leaders vowed to continue developing the Russia-EU strategic partnership.