Ukraine wants trade agreements with EU and Russia

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Ukrainian President Viktor Yanukovich said his country planned to sign an Association Agreement with the EU in the course of 2013. But he also stressed that the country would develop its relations with Russia’s Custom’s Union in areas which do not contradict other “international obligations”. 

In a wide-ranging interview published today (4 January) by the daily Komsomolskaya Pravda Ukraine, Yanukovich mentioned three priorities in his country’s foreign relations: the country's presidency of the Organisation for Security and Cooperation in Europe; the signing of an Association Agreement with the EU; and the development of “close partnership” with the Customs Union between Russia, Belarus and Kazakhstan, as well as with other organisations that he did not name.

Ukraine says it wants to have close relations with the EU, but has been unable to sign its Association Agreement, although its text was agreed more than a year ago (see background). The text of the 906-page Association Agreement was recently published by BlogActiv.

The signature of the Association Agreement and the Deep and Comprehensive Free Trade Agreement (DCFTA) is expected to be signed at the Vilnius Summit of the EU’s Eastern Partnership in November 2013, depending on progress in three areas:

  • Compliance of the 2012 parliamentary elections with international standards and follow-up actions;
  • Progress in addressing accusations of selective justice;
  • Implementation of the reforms defined in the jointly agreed Association Agenda.

At the same time, Ukraine has been under pressure from Russia to join its Custom’s Union that also includes Belarus and Kazakhstan,

Russia says Ukraine was “welcome to join” the Customs Union and claims it was “putting no pressure” on Kyiv. However, Moscow says Kyiv has to choose between the EU and Russia.

Yanukovich said his country was “seeking instruments and possibilities” for mutually beneficial cooperation with the Customs Union, mentioning that the trade exchange of his country with the trade bloc amounted to €46 billion.

“I believe that Ukraine should consider adapting its national legislation to the Customs Union rules that would not conflict with our international obligations. Now on this issue is in the hands of experts on both sides,” Yanukovich said.

Ukraine’s president said officials were expected to table specific proposals on 18 December. On that day, Yanukovich was expected to meet Russian President Vladimir Putin in Moscow, but the visit was cancelled at the last minute.

Yanukovich added that the meeting had to be postponed to a later date due to lack of agreement on all the details of future accords.

Commission response

A Commission official told EURACTIV that one has to distinguish between a Free Trade Agreement and a Customs Union.

Ukraine’s membership in a Free trade agreement with other countries does not contradict DCFTA, as long as these agreements do not undermine the commitments made with the EU. So Ukraine is free to conclude other trade agreements in accordance with its economic priorities, the official said.

However, if Ukraine were to join any customs union, this would not be compatible with concluding a bilateral DCFTA between the EU and Ukraine. A customs union has a common external trade policy (for example a common external tariff) and an individual member country can no longer have a sovereign control over its external trade policies, the EU official explained.

However, the EURACTIV source said that the EU executive had understood from the latest statements made by Foreign Minister Leonid Kozhara that it was not Ukraine's intention to join the Customs Union of Russia, Belarus and Kazakhstan.

The EU recently announced that an EU-Ukraine summit would be held on 25 February.

The last EU-Ukraine summit was held in December 2011.

The December 2011 EU-Ukraine Summit failed to initial the country's Association Agreement with the Union, largely due to the imprisonment of former Prime Minister Yulia Tymoshenko that Brussels sees as politically motivated.

The five-year negotiations over the Association Agreement were concluded, but EU leaders made it clear that the deal would not be signed until improvements are made to the "quality of democracy and rule of law" in Ukraine.

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