Anton Pidlutskiy is the vice-president of the Agency for Investigative Journalism.
The Ukrainian government repeatedly declared that the full membership in the EU is the strategic objective. The EU Association Agreement signature is exactly the first step to achieve it. At the same time the issue of the EU membership for Ukraine will be solved exclusively through the people’s referendum as only the Ukrainian People are entitled to take this decision.
At this stage the association agreement with the EU for Ukraine – is, first of all, the possibility to expand the geography of the trade and economic relations and to adopt the European experience of doing business simultaneously harmonizing its legislation with the EU laws.
After the signing of the agreement, the process of Ukraine’s integration into the European economic space will be long and painstaking.
Ukraine will have to resolve a great number of technical questions to agree upon the standards, legal acts and rules for doing business.
The AA provides for a transition period of 10 years while Ukraine is cooperating with the EU in the testing mode. The country will need to do a lot in order to prove the seriousness of its intentions after the Summit.
And not always that which is beneficial for one party can be acceptable for the other.
The Free Trade Zone (FTZ) with the EU has both its advantages and shortcomings for Ukraine.
The European economic crisis has revealed a number of problems concerning the unwillingness of the leading EU economies to equally distribute risks.
The European system has not always coped with the diversity of the socio-economic development of the new EU member countries, making sometimes hasty and politically motivated decisions. The example of Greece – is indicative. European politicians have not once spoken about the mistake of its acceptance into the EU.
After the signature, Ukraine will approach its optimal choice of the foreign economic course. The policy of the economic pragmatism is difficult to realize and requires the Ukrainian government to skillfully manage the foreign trade relations. Analyzing the economic consequences for Ukraine’s accession, today it is possible to say that it is the agricultural sector which has the biggest possibilities and potential for development.
Ukraine hopes that the FTZ creation will allow for the expansion of the Ukrainian foodstuffs in the European market. Data compiled by the Ministry of Economic Development and Trade show that the reduction of customs duties will add €330 million for agricultural produce and€ 53 million for processed agricultural goods.
The new opportunities created by access to the EU market and the introduction of higher standards of production will boost the modernization of the agriculture and improve working conditions in Ukraine.
Last year, export of Ukraine’s agricultural foodstuffs increased by 40% and amounted to €13.5 billion. According to Ukraine’s Ministry of Agricultural Policy and Food, gross agricultural production in 2013 will increase by 8%.
During the first seven months of 2013, Ukraine has supplied €1.9 billion of agricultural produce to the EU market, which is 16.3% more that in the same period of 2012.
Western experts believe that after the signing of the agreement with the EU, Ukraine has to prepare for a ‘food boom.’
According to the UN Food and Agriculture Organization, by 2020 Ukraine will have the highest percentage increase in domestic agricultural production in the world. At the same time exports may grow by 60%.
Ukrainian experts believe that, as soon as this year, the country may become the second largest grain exporter in the world, after the USA.
Of great importance is also the liberalization of the visa system. Even taking into consideration the sensitiveness of European countries in their approach to the migration issues, this is one of the key priorities for Ukraine’s integration course.
The freedom of travel should remain an attractive aspect that singles out the EU from other international unions. So far, the some EU embassies selective approach to issuing visas (in particular the Belgian embassy) has proven counterproductive and needs to be eradicated.
Ukraine’s expectations from the association agreement signature and the free trade zone are connected, eying the positive effect for its own economy.
But Kiev aspires to develop partnership relations with many countries and international unions. It is not about multivectors, but the desire to implement an economic pragmatism and diversify the export markets. Ukraine hopes that the EU will act as the financial guarantor of the economic transformations for the its economy.
The positive signal for Ukraine might be the statement of Sweden’s minister of external affairs, Carl Bildt, about the plans of the Swedish government to allocate €500 million by the end of this year for the participant countries in the “Eastern Partnership” program.
It is an addition to the currently discussed large scale program of support for the countries of this region during the period of 2014-2020, which the EU hopes to provide.
The World Bank intention to expand the funding of Ukraine will also significantly improve the investment attractiveness of Ukraine. In particular, the World Bank’s Director for Ukraine, Belarus and Moldova, Qimiao Fan, stated that he can see possibilities to double the volume of loans, provided for Ukraine, from the current €367.8 million a year.
Ukraine expects that the Association Agreement signature with the EU and the renewal of the cooperation with the financial organisations will positively affect its international economic attractiveness.
It should become a powerful stimulus for foreign investors and improve Ukraine’s positions in the global ratings of financial and investment attractiveness.
Thus, after the Vilnius Summit of the Eastern Partnership, a wide scope of opportunities will appear in the relations between Ukraine and the EU as well as a long way of reforms for the Ukrainian state.