eadiness to operate under conditions of free competition must be noted. Russia, however, is still outside the WTO and thus does not benefit from the prohibition of quotas. While the General System of Preferences allows Russia to enjoy some tariff concessions on its exports to the EU, the lack of Free Trade Area between Russia and the EU means that no concessions are granted to Russian imports from the EU. The creation of the Free Trade Zone with the EU should shape long-term Russian foreign policy toward the EU. 3. Further development of Russian –EU Partnership relations Through the Partnership and Cooperation Agreement (PCA) ratified in 1997, Russia can soften the negative effect of EU eastward expansion. Implementation of the agreement will lead to liberalization of trade and could eventually help to create an FTZ. Even after the collapse of the Soviet Union, Russia is classified as a non-market economy in European Community Legislation. This status has had an impact on its export possibilities for finished and semi-finished goods, allowing the Commission to determine whether Russian goods are exported below their actual price. Brussels now appears ready to make concessions making it easier for Russian firms to sell their products in the EU. The PCA has recognized that Russia is no longer a state trading country: it was now a country with an economy in transition. In November 1999 the European Commission recommended that Russia no longer be classified as a “non-market economy” and offered to change the criteria by which it judges whether Russian producers are “dumping” goods in Europe. The PCA will create a closer relationship between the EU and Russia, ensuring a more stable climate for traders and investors. The PCA will offer numerous benefits to the business community: Most Favored Treatment will be applied to EU companies moving to Rus...
