…HIGHLIGHTS DILEMMA OVER REGION’S FUTURE.

Russia will soon have to make up its mind over Kaliningrad since countries on either side of the exclave are heading for membership in NATO and the European Union. Poland is in the first wave of NATO-invitees and is expected to join the EU within the next decade. Estonia is among the front-runners for EU enlargement, while Lithuania and Latvia are in the second wave. A major consideration for would-be EU entrants is freedom of movement across their borders. They will have difficulty negotiating with the EU to secure early free movement of their citizens if they cannot show that their borders with Russia are secure. They are already therefore taking steps to tighten border controls with Russia. This creates problems for the economy of Kaliningrad, which has thrived on informal (some but not all of it illegal) trade with its immediate neighbors. Impeding the movement of people across borders will raise the cost of such trade and Kaliningrad’s economy will be damaged if it has to rely only on Russia for the bulk of its trading relations.

One idea being proposed in Kaliningrad is that the region should seek a special free-trading relationship with the EU. (Svobodnaya zona [Kaliningrad], December 20, 1997) This may not be as far-fetched as it sounds. Western governments will be under pressure from Moscow to soften the impact of EU and NATO eastward extension, and this could be one way of sweetening the pill. From Russia’s point of view, the advantage would be that Russian companies in such a zone would be virtually inside the EU. However, Kaliningrad’s history as Russia’s strategic outpost on the Baltic Sea leads many Russian politicians to see the region as primarily a military asset and therefore a location to which any access by foreigners should be severely restricted.

Pessimistic Assessment on the Eve of Two Summit Meetings.