Delegation of the European Union to the Republic of Moldova

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The Republic of Moldova and the EU

12/05/2016 - 14:56
EU relations with Country

Overview of political and economic relations between the Republic of Moldova and the European Union.

Political relations

Relations between the European Union (EU) and the Republic of Moldova are deep and multifaceted. The Republic of Moldova participates in many EU agreements and programmes.

The two sides are deepening their relations with the EU-Moldova Association Agreement, which was signed in June 2014. The new framework is innovative and ambitious, including a Deep and Comprehensive Free Trade Area (DCFTA) and an Association Agenda aimed at furthering economic integration and political association between Moldova and the EU. The Association Agreement replaces the previous Partnership and Cooperation Agreement, which had been in force since July 1998.

The EU seeks to improve democracy, the rule of law and human rights in the Republic of Moldova, including in joint programmes with the Council of Europe. The Union also supports efforts to achieve Transnistria settlement.

Other priorities for relations with the Republic of Moldova include strengthening the institutions, reforming the judiciary, improving the business climate, ensuring respect for freedom of expression, improving health and social conditions and cooperating on issues such as border management, migration and the fight against trafficking, organised crime, corruption and money laundering.

The Republic of Moldova is a priority partner country within the Eastern Partnership, the eastern dimension within the European Neighbourhood Policy (ENP). Partnership countries and the EU commit to deepening their ties, including through free trade agreements, eventual visa liberalisation and EU-funded projects. The Eastern Partnership offers both bilateral and multilateral measures for enhanced cooperation.

Moldova benefits from a Mobility Partnership with the EU as one of the two pilot countries in the world. As detailed in the general approach, the Mobility Partnership organises cooperation in the field of migration, including areas such as legal migration, development and fighting against illegal migration. Around 40 initiatives are currently being implemented within the Mobility Partnership between the EU and Moldova.

Moldova is also a partner country within the Black Sea Synergy and is a member of the Energy Community

Economic relations

Deep and Comprehensive Free Trade Agreement

The EU and Moldova signed a Deep and Comprehensive Free Trade Area (DCFTA). This provides substantially improved access to the EU market of over 500 million consumers for Moldovan goods and services, as well as improved investment opportunities. Economic cooperation extends to numerous individual sectors.

Autonomous trade preferences provide duty-free and quota-free access for almost all Moldovan goods to the EU market. This has provided considerable support to Moldovan companies, since 50 % of Moldovan trade is with the EU. The EU is also working to ease air travel and agricultural trade with Moldova.

Financial Assistance

The EU is by far the largest donor in Moldova, supporting political and economic reform, and providing humanitarian aid. Bilateral assistance to Moldova under the European Neighbourhood Instrument (ENI) sharply increased from €40 million in 2007 to €131 million in 2014. Moldova is the largest recipient of EU aid per capita in the European neighbourhood.

EU assistance is being used for key reforms in the justice, education, economic development and energy sectors. The EU has also funded investment in air and road infrastructure, as well as Cross-Border Cooperation (CBC) projects. In addition, Moldova profits from numerous thematic programmes, mainly supporting civil society and regional programmes linked with Trans-European networks.

EU financial aid to Moldova has funded numerous and diverse projects, including:

  • improving public administration and financial management;
  • reform of the social aid system;
  • emergency aid responding to increases in heating tariffs;
  • energy production based on solar and agricultural waste, waste collection;
  • health care reform and equipment;
  • care centres for the young and old;
  • natural disaster relief;
  • rural economic activity;
  • water supply and waste water treatment infrastructure.

The EU is also supporting the implementation of confidence-building measures in the Transnistrian region of Moldova through health care and social projects.

Trade

Trade between the Republic of Moldova and the European Union

The EU is the most important trading partner for the Republic of Moldova ("Moldova").

The Association Agreement between the EU and Moldova has brought deep and comprehensive free trade between the two partners. This means Moldova benefits from reduced or eliminated tariffs for its exports to the EU, an increased services market and better conditions for attracting foreign investment. The Association Agreement has been provisionally applied since September 2014 and fully entered into force on July 2016.

Clear shift towards the EU

Since 2005, Moldova’s trade has dramatically shifted towards the EU. Around two thirds (66%) of Moldova's exports went to the EU in 2016, followed by Russia (12%) and Belarus (5%).

The shift towards trade with the EU occurred due to the successive liberalisation of trade with the EU since 2008. Following the application of the Association Agreement, EU imports from the Republic of Moldova increased by 5.5% in 2015 and by 7.7% in 2016.

Main products exported to the EU

The top products exported from Moldova to the EU are:

  • Machinery and appliances, for instance electrical cables
  • Textiles, including clothes and knitwear, and shoes
  • Agricultural products and beverages, including fruits, nuts, maize, wheat, sunflower seeds, oils
  • iron and steel.

EU trade partners

All EU member states trade with the Republic of Moldova, but the biggest share of Moldovan exports goes to Romania, Italy, Germany and Great Britain.

In 2016, the exports from the EU to the Republic of Moldova have decreased by 2%. Key EU exports are machinery and appliances, mineral products, transport equipment, and chemical products.

Potential for higher exports to the EU

Access to the European markets will further increase once Moldova has aligned its health and safety standards to those of the EU. The food safety reform will enable Moldova to export its agricultural products, notably animal products, whose safety for consumers is strictly controlled in the EU.

Products meeting EU standards are accepted on markets worldwide. If Moldovan companies adopt EU product standards, this will open additional markets for them.

Compatibility with other free trade zones

The Association Agreement with the EU is compatible with all other free trade agreements that the Republic of Moldova is part of. Under the Association Agreement, Moldova can trade freely with the EU, Russia and the Commonwealth of Independent States at the same time. Moldova also retains full sovereignty over its trade policy since it is not a member of any customs union.

Membership of the Eurasian Economic Union

The Eurasian Economic Union is a customs union where its members give up full control of their trade policy. Membership of the Eurasian Economic Union is not compatible with the Association Agreement with the European Union.

Read more

More on EU-Moldova trade relations

More details about the Deep and Comprehensive Free Trade Agreement between the EU and the Republic of Moldova

Recent EU statistics on EU-Moldova trade

EU trade policy

Practical information for exporters to the EU

Export helpdesk

Information on EU rules of origin

EU Joint Programming

1. EU JOINT PROGRAMMING

Joint Programming is the joint planning of development cooperation by EU development partners working in a partner country. It is a policy tool contributing to a stronger Europe, by bringing together resources and capacities. Now, more than ever, the European Union, the Member States and other like-minded governments need to join forces, programme their development cooperation together and, eventually, develop a strategic and coordinated response to key challenges such as migration and climate change. Working closely together will enhance the EU's ability to decisively contribute to the partner country's national development plan and to support our partners in the implementation of the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda.

For more information on how Joint Programming progresses in each partner country, please visit our website: http://capacity4dev.ec.europa.eu/joint-programming and https://jptracker.capacity4dev.eu/ or contact us here: DEVCO-Joint-Programming-Support@ec.europa.eu ; JOINT-PROGRAMMING-SUPPORT@eeas.europa.eu ; NEAR-JOINT-PROGRAMMING@ec.europa.eu

2. EU JOINT PROGRAMMING IN THE REPUBLIC OF MOLDOVA

Joint Programming laid the foundations for European partners to join forces to provide a response that was well coordinated with other development partners' support to the Republic of Moldova (hereinafter referred to as Moldova). A Joint Analysis and a Joint Response/Strategy were completed in respectively 2016 and 2017, and are aligned with Moldova’s National Development Strategy "Moldova 2020".

The process leading to the Joint Strategy started in early 2015, when the European Union and 15 EU Member States plus Switzerland agreed to conduct a Joint Analysis of the economic and social development context of Moldova. The detailed analysis is a tool to improve the relevance and effectiveness of programming whilst building on existing good development practices in thirteen priority areas for European development cooperation.

Based on this analysis, the Joint Response – titled "European Joint Development Cooperation Strategy for the Republic of Moldova" (updated in 2018) – was developed, containing input from Austria, Czech Republic, Estonia, France, Germany, Hungary, Italy, Latvia, Lithuania, the Netherlands, Poland, Romania, Slovakia, Sweden and the United Kingdom along with the European Investment Bank and like-minded donors such as Switzerland and Liechtenstein. The Joint Strategy thus builds upon the shared views and objectives, and the existing and future financial assistance planning of the European partners and is designed to ensure enhanced coordinated policy dialogue, as well as joint monitoring of reform implementation in accordance with the EU-Moldova AA/DCFTA. This process and product reflects the efforts, consultations and contributions made by all relevant stakeholders: the EU Delegation, EU Member States, the Government, the Donor community at large, the European Investment Bank, Civil Society and the private sector.

The Joint Strategy is structured around the following four broad areas of intervention:

  1. Economic development and market opportunities including sustainable and inclusive economic growth, social protection and health (active European development partners: Austria, Czech Republic, EIB, EU, Estonia, Germany, Latvia, Lithuania, Poland, Romania, Sweden, Switzerland and UK);
  2. Strengthening institutions and good governance including the Rule of Law and Security (active European development partners: Austria, Czech Republic, Estonia, EU, France, Germany, Hungary, Italy, Latvia, Lithuania, Netherlands, Poland, Romania, Slovakia, Sweden, Switzerland and UK);
  3. Connectivity, energy efficiency, environment and climate change (active European development partners: Austria, Czech Republic, EU, EIB, Germany, Latvia, Lithuania, Romania, Slovakia, Sweden and Switzerland);
  4. Mobility and people-to-people contacts including support to the Visa Liberalisation benchmarks and to education, training and research (active European development partners: Austria, Czech Republic, Estonia, EIB, EU, France, Germany, Italy, Latvia, Liechtenstein, Lithuania, Netherlands, Romania, Slovakia, Switzerland and UK).

Three cross-cutting priorities were also identified: civil society, gender equality and strategic communication. Meanwhile, the EU, EU member States and Switzerland developed the EU ROADMAP FOR ENGAGEMENT WITH CIVIL SOCIETY IN THE REPUBLIC OF MOLDOVA 2018-2020 which builds an annex to the joint response.

Reference documents:

 

See Also

Moldova trade policy
Association Agreement
Autonomous Trade Preference
Review of the European Neighbourhood Policy
EU-Moldova relations factsheet
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