Mandelson raises prospect of free trade agreement with Ukraine

The EU trade commissioner has said that, if Ukraine continues its
reforms, an EU-Ukraine free trade agreement would
be possible.

While acknowledging that negotiating a free trade
agreement is a longer term objective,  EU Trade
Commissioner Peter Mandelson said that it was a distinct
possibility provided that Ukraine continues its reforms. “I
want to deepen trade and economic relations with a reforming
Ukraine,” said Mandelson on 17 January. 

The trade commissioner said he would propose granting market
economy status for Ukraine when it has done away
with price-fixing practices and reformed its bankruptcy
procedures and VAT refunds.

Currently, negotiations focus on concluding a deal granting
Ukrainian textile and steel products better access to the EU
market. “These are key trade sectors between Ukraine and the EU,
representing one-third of Ukrainian exports,” Mandelson
explained.

In 2003, Ukraine traded around 14.5 billion euros worth of goods
and services with the EU. Agricultural products and energy
accounted for about one-third of this amount. 

The EU has renewed its close ties with Ukraine
following a decision by the country’s Supreme Court to
repeat the presidential elections of 21 November due
to allegations of fraud. The rerun, on 26 December,
was won by pro-EU Viktor Yuschenko although the Ukrainian
Supreme Court is still hearing an appeal by his contender, Viktor
Yanukovich, who won the first round. A negative Supreme
Court decision is widely expected later this week, after which
Yuschenko could be officially sworn in.

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