Ukraine is dedicated to concluding its free trade negotiations with the EU - without joining Russia's project for a Customs Union with Belarus and Kazakhstan - and hopes Japan and other nations will heed the lessons of Chernobyl as they deal with the aftermath of Fukushima, says Ukraine's Deputy Economy Minister Valery Piatnitsky in an exclusive interview with EurActiv Germany.
Valery Pyatnitsky is Ukraine's deputy economy minister and head of the country's trade negotiating team to the European Union.
He was speaking to EurActiv Germany's Ewald König and Michael Kaczamarek.
What is the current state of play in the negotiations on a Free Trade Agreement (FTA) between Ukraine and the EU?
We are discussing different trade-related policies with the Commission. This concerns agriculture, industrial policy or protection of intellectual propriety and of course energy issues. Some issues are still pending since they are very sensitive for both parties. Our major goal is to harmonise as much as possible our legislation, our environmental regulations and our institutional capacities to the basic rules of EU. I hope that in five or ten years we will find our place on the EU's internal market. We will not be only trade competitors but we will also be trade partners.
So your goal is to get the FTA established in five to 10 years?
I hope that this year we can finalise our FTA negotiations in order to ratify this agreement in 2012. The FTA is not a one moment action. To develop the environment for a real free movement of goods and services will need much more time.
It is our task to adopt certain legislation, to develop new institutions. This implies a lot of work for us in different spheres: veterinary medicine or sanitary control, technical regulations. Of course this will take sometimes three, sometimes five or seven and sometimes perhaps up to ten years. I hope that in ten years we will talk about real free movement of goods and a more or less free movement of services. This will bring us, Ukraine and the EU, much closer. Afterwards we will consider further steps of European integration.
There is still no breakthrough in the negotiations between the European Commission and Ukraine regarding agricultural products. So why are you so optimistic that an agreement might be finalised by the end of the year?
We are not overly optimistic but I think it is a realistic goal. That's why we continue our talks in Brussels. There are some basic regulations on health protection of plants, animals and people which are not an issue for negotiation.
I think for example of regulations on veterinary medicine or sanitary control. We should adopt these basic EU rules as soon as possible. This would increase the competitiveness of our products on the EU market and on third markets. And we could attract more foreign investment to improve our technology, which would reduce our production costs. Agriculture is becoming more and more of a capital intensive industry.
The complicated issues of the negotiations concern market access and the level of protection. Let's take the tariff measures. On the majority of products we agreed to reduce duties during a certain period of time up to seven years to the level of zero. There are a number of products, like meat products, cereal, dairy products, fruits or vegetables, where Ukrainian producers and EU producers compete directly on the market.
The EU traditionally uses tariff-rate quotas (TRQ) for producers from third countries. Let's take for example sugar, a very sensitive product. We received the proposal that we might import up to 10,000 tons of sugar without additional duties. This volume corresponds to the production of one small factory in Ukraine.
The question is whether this is acceptable or not. From the point of view of Ukrainian producers this is not sufficient; it is not acceptable. From the point of view of European producers it is a huge amount which creates additional competition on the European market. We talk about different interests of different producers. Our intention is to have better access to the European market. And your producers want to have better access to the Ukraine market.
Just for comparison: in Ukraine the average tariff for agricultural products is less than 10%. In some cases the difference between the European tariffs and Ukrainian tariffs is fantastically high, ten times, 20 times. For meat and dairy products we have the level of duties of ten or 14%. At the same time the EU has a tariff level of 100% or 150% or more. That makes it difficult for negotiators to find a proper solution.
Does your commitment to the FTA negotiations with the EU imply that Ukraine will not join the Customs Union of Russia, Belarus and Kazakhstan?
Indeed. Joining the so-called Customs Union is no option for us for the moment. This Customs Union between Russia, Belarus and Kazakhstan is only in an initial stage. They are still developing the regulations and it will take another five or 10 years to establish this customs union.
Our priority is free trade with EU. If we decide to join the customs union we should stop our negotiations with the EU. We are trying to develop a so-called balanced policy. We want to improve our trade relations with CIS countries and we are trying to conclude the FTA with the EU as soon as possible. We hope that this balanced approach will create a kind of safety net for our economic development and trade relations. This would be real added value.
The European Union is currently reforming its Neighbourhood Policy. The EU seems to focus more on its Southern Neighbourhood Policy. Do you think this might affect negatively the Eastern Partnership and relations with Ukraine?
Bilateral relations between Ukraine and the EU are our absolute priority. We negotiate bilaterally on a free trade area or a visa-free regime.
The Eastern Partnership is an additional instrument for better cooperation in the region. All these projects are also in the interest of the EU. For example, we have projects of integrated border control to prevent illegal immigration. The same goes for the energy or infrastructural projects or transportation deals. I think that EU will find a balanced approach for its Southern and Eastern neighbours.
Do you think that North Africa-style revolutions might take place in Ukraine's Eastern neighbouring countries?
No, I don't think so. I don't expect revolutions in our neighbouring countries in the near future.
And a new Orange Revolution in Ukraine?
The Orange Revolution expressed the wish and the will of the people to change the situation with regard to democracy, freedom of speech and other freedoms, and to improve the rule of law. We were more optimistic on the long-term consequences of these events. Nevertheless, we now have an absolutely different country compared to Ukraine in the early 2000s. We have an absolutely different society.
There have been changes in the fields of mass media, in the configuration of political forces in Ukraine and in general democratic movements. We are undergoing a normal process of development. Our country is only twenty years old, twenty years of modern history. In Soviet times we were in a different situation.
Now, the general trend is a trend of democratisation. I hope that in the next few years there will be progress not only from an economic point of view but also regarding basic rights, democratic rules. The European Union could support this development by lifting visa requirements. Our people could see and learn how democracy works. We opened our borders five years ago to EU citizens. We are still waiting for more openness from the EU side.
Is there any progress in negotiations between Ukraine and the EU?
We can talk about progress when our people have free access to the European Union. The Ukrainian government is determined to cope with our tasks. The Commission will see real progress when it visits Ukraine in June.
Ukraine's government has announced many reforms. Which progresses have been made fighting corruption?
The present government has initiated many reforms: pension reform, reforms of public services, interior reforms. We are planning many other reforms, including a new tax code. Now, we are only in an initial stage. Through the changes in our tax system we will stimulate the real economy. We hope it will also help us to reduce the level of corruption on different levels, because one of the most corrupted spheres was especially the sphere of collecting taxes. It was well known.
Currently, parliament is discussing a set of legislative initiatives that will help to reduce the level of corruption. We recently adopted new legislation in government procurement, one of the spheres where the level of corruption was quite high. We had complaints from our partners from different countries and we are trying to implement a number of reforms to reduce the level of corruption. Our negotiations with the EU are a tool to reduce corruption. We cannot succeed in all spheres immediately, but we are optimistic that we can achieve positive results step by step.
The nuclear catastrophe in Fukushima is shaking the world. People are reminded of the nuclear catastrophe at Chernobyl 25 years ago. How did you experience the Chernobyl catastrophe and what do you feel now when you see the videos and pictures from Japan?
25 years ago, there were no pictures of Chernobyl. Everything was covered up. The pictures and images on TV suggested that everything was okay. I knew this history because my father participated in covering the Chernobyl plant after the explosion.
What did he do at the plant in Chernobyl?
The day of the catastrophe, on 26 April 1986, we celebrated my father's 50th birthday. Suddenly, he received a call from Chernobyl and he went to Chernobyl to organise some preparations. So I knew the true story from the beginning. Unfortunately, we still have to experience these radiation troubles. Chernobyl will affect many generations. It will take another 575 years for the territory to be completely clean of radiation.
Now, in Japan things are different since we do see what is happening and it is a real disaster. I hope the consequences of the accident in Japan will be less dangerous than in the Ukraine.
How are Ukrainians reacting to images of the catastrophe at Fukushima?
Many Ukrainians have the intention of inviting people, children from Japan to spend some time in Ukraine. We appreciated this support of other countries after the Chernobyl catastrophe. Many of our children spent at least the summer time in different countries.
On the territory of the so-called exclusion zone around Chernobyl, shortly after the catastrophe, a scientific research centre was formed by 15 countries, including Japan. Many Japanese scientists alongside German, Danish, Dutch or Americans could study the aftermath of Chernobyl and its impact on nature, the environment, and human beings. As paradoxical as it is, now they can use this research, this experience.
Currently, we are preparing the Kiev summit on the innovative and safe use of nuclear energy which will take place on 19 April. We believe that this summit will be a proper platform to discuss how to deal with these issues in the future. We started the preparations in the framework of the 25th anniversary of Chernobyl and know it turns out to be quite an issue. We hope that leaders of many countries will come to Kiev to this summit to analyse the mistakes and learn the lessons. The major point is the future development of nuclear energy.
The only lesson to be learned is the abolition of nuclear energy, isn't it?
No. In the past 25 years since Chernobyl, we learned not to be afraid, but to be wise and to be cautious. People keep flying with planes even though there are so many airborne catastrophes.
The world has learned so much from the Chernobyl catastrophe and it will learn more from the catastrophe in Japan. Maybe in the future there won't be nuclear power plants in areas that are potentially threatened by earthquakes. But to give up completely the development of nuclear energy is not the wisest decision.
Nuclear energy is still the least polluting, cheapest energy. Sweden, for example, develops its nuclear energy technology and therefore has much less CO2 pollution than Denmark, which has its emphasis on renewable energy.
So giving up nuclear energy is no option for Ukraine?
No, this is no option. The point is not about giving up nuclear energy. The point is how to really make use of nuclear energy safe. First we have to improve our energy efficiency; afterwards we can reduce use of nuclear energy.
Are your nuclear plants earthquake-resistant?
Yes, regarding the likely magnitude of earthquakes in Ukraine. The last big earthquake in Ukraine occurred in 1927, hitting the Crimean Peninsula. After Chernobyl, we stopped a project to build a nuclear power plant on Crimea. There are no plans to build plants in areas that can be hit by earthquakes. We only build plans in areas which have never before experienced earthquakes. Our nuclear power stations are built on geologically stable platforms.
How will Ukraine commemorate the 25th anniversary of the Chernobyl catastrophe?
There will be three major events. On 19 April we have the afore-mentioned Kiev summit on the innovative and safe use of nuclear energy and a pledging conference. On 20 April there will be a scientific and practical conference which is co-organised together with German institutions. On 26 April, the day of the tragedy, there will be some ceremonies dedicated to the memory of those who gave their lives to save us from the worst consequences of the catastrophe. The so-called liquidators will have their gatherings, too.