UKRAINE at a Crossroads
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EU leaders impressed by Ukrainian resolve to join Europe
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By Grahame Bennett
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spacer A free trade pact would remove import duties on more than 95 per cent of goods traded between Ukraine and Europe.

he government in Kyiv will be greatly motivated by Europe’s confidence in Ukraine’s ability to pursue the course toward full European integration.

The fourteenth EU-Ukraine summit held in the Belgian capital, Brussels, on November 22 was an important milestone along that difficult road.

Reports described the meetings as friendly and productive; the two sides laid out concrete action strategies to align the candidate nation for entry into the 27-nation bloc.

To dispel anyone’s doubts that the former Soviet-bloc nation was resolved to join Europe, President Viktor Yanukovych reiterated at the summit that EU membership is one of Ukraine’s strategic goals.

The two sides agreed in Brussels on a strategy to put in place a vital component of integration that would help open up Europe to unfettered travel for Ukrainians.

European Council President Herman Van Rompuy delivered that news.

“I’m very pleased that we can announce today an action plan for Ukraine toward the establishment of a visa-free regime for short-stay travel,” Van Rompuy said after the talks concluded.

To this end, Europe’s second largest country will improve its border controls and align asylum and migration policies with European standards. The government in Kyiv will also have to create biometric passports for those among the 46 million citizens who want to visit European countries.

In addition to the visa status, the two sides penned a protocol to their partnership and cooperation agreement giving Kyiv access to more European programs.

Also the EU said it may strike a free trade pact with Ukraine by the middle of 2011, a step that could allow it to join the European bloc more quickly, if the reform process continues.

EU Ambassador to Ukraine Jose Manuel Pinto Teixeira said Europe has a positive expectation of the Ukraine government, and went on to tell reporters in Kyiv, “An EU-Ukraine free trade agreement could be wrapped up in terms of negotiations by next summer if the political will exists.”

That will has to be on both sides.

The parties need to remove import duties on more than 95 percent of traded goods to conclude negotiations that have been ongoing since early 2008.

That is a tall order because there are a number of issues to resolve, mainly in the agricultural sector.

The EU Ambassador to Ukraine told Reuters news agency last month, “We are negotiating an agreement, but this agreement has some standard requirements that are not negotiable.”

One of them is that the EU is not prepared to reduce the protective measures its farmers enjoy, such as minimum entry prices.

The dilemma is that retaining the protections will reduce the competitive advantages enjoyed by Ukraine’s agricultural sector. Kyiv is hoping to attract European investment into its vital agricultural sector and boost sales of its agricultural products.

Ukraine also wants to retain duties on imported EU cars to protect its automobile industry.

Europe is peeved that many Commonwealth of Independent States (CIS) treat a number of EU trademarks as generic product names.

Trade between Ukraine and the European bloc fell from $40 billion in 2008 to just $22 billion in 2009, owing to the global economic crisis.

The financial downturn particularly hit hard the country’s steel industry which provides the country with major export revenues.

Nevertheless the European heads welcomed the nation’s reforms aimed at ensuring an early return to growth and competitiveness. To assist Ukraine’s economic recovery, the EU committed a macro-financial assistance package worth €610 million.

Kyiv had earlier secured an International Monetary Fund (IMF) standby loan tied to a macro-economic stability plan.

Currently Ukraine’s economic and political outlook is considered relatively stable, while the World Bank forecasts economic growth to reach 3.5 percent in 2010.

The country mainly imports European transport equipment, machinery, clothing and textiles, agricultural products, and chemicals.

Its primary exports to Europe are steel, iron, chemicals, agricultural goods, and oil and gas products.

Natural gas security is a high priority for Europe, which is heavily dependent on Russian exports and a major gas pipeline transit route through Ukrainian territory.

The 27-nation bloc relies on Moscow to provide a quarter of its needs, while seven countries are almost totally dependent on Russian natural gas.

Consequently Russian-Ukrainian relations are important to Europe.

But in January 2006 Russia stopped the flow of gas to Ukraine in a row over prices, which resulted in a cut in supplies to downstream Europe. The two countries resolved the issue in days.

However in January 2009 Russia turned off the spigots once again in a spat over Kyiv’s mounting gas debts.

The incidents shook Europe’s trust in Ukraine as a reliable partner.

President Yanukovych promised at the summit that Europe would not face the same problem.

“I would like to tell our European friends once again that Ukraine guarantees an uninterrupted supply of energy resources to Europe,” the Ukrainian leader told a joint news conference in Brussels.

European Commission Chief Jose Manuel Barroso, standing beside him, expressed relief.

"I particularly welcomed the very strong political statement made by President Yanukovych during our summit today that we will never have a gas crisis like the one we had before," Barroso responded.

Barroso went on to say that this is one of the reasons Europe places great importance on developing a “triangular relationship between Ukraine, Russia, and the European Union.”

As part of efforts in that direction Europe hosted separate talks in Brussels among Russia’s Minister of Energy Sergei Shmatko, the European Commissioner for Energy Guenther Oettinger, and Ukraine energy officials.

Ukraine has steered an unsteady course between seeking closer integration with Western Europe and reconciliation with its main energy supplier, Moscow, since gaining independence from the Soviet Union in 1991.

While a large minority of the population in the east of the country are Russians or pro-Russian, many residents in the west have close ties with European neighbors and express strong nationalist sentiment.

Also, earlier efforts by Kyiv to seek membership in Europe and the North Atlantic Treaty Organization (NATO) were slowed by Western reluctance to provoke a resurgent Russia.

Moscow was particularly hostile to NATO expansion plans and distrusted European motives as a result.

In 2008 Russian President Dmitry Medvedev went so far as to warn Ukraine that joining NATO would breach their friendship treaty and may result in “serious consequences.”

Since winning the Presidency in February 2010, Yanukovych said he intends to balance Kyiv’s relations between Moscow and Brussels, with inclusion within Europe as a “strategic aim.”

In June the Kyiv government voted to abandon the country’s NATO membership ambitions, while proceeding toward European membership.

And two years after the warning, Moscow’s mood had changed.

When asked in November his views on Ukraine’s EU aspirations, Medvedev said, “there is nothing to comment on, as Russia is not a member of the European Union,” and the country should choose its alliances in conformity with public sentiments.

And although European leaders used the summit to remind Kyiv of its need to continue to implement the core values of democracy, rule of law, and respect for human rights, they lauded the current leadership for its positive political developments.

“Ukraine is seeing a period of political stability with close coordination between the president and the government, based on a strong parliamentarian majority,” EU Council head Van Rompuy said. “This enables Ukraine to move forward with important reforms.”

 

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spacer arrow EU leaders impressed by Ukrainian resolve
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