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Ukraine - EU Relations

Simon Tilford notes that "A country with centrifugal tendencies, deeper Soviet scars, a weak basis for civil society and a powerful neighbour intent on frustrating its development explains much of the difference in economic performance with Poland. The EU accounts for much of the rest. From the mid-1990s, the EUs drive to engage with Russia and build commercial links with it took precedence over the needs of Ukraine. Indeed, many EU governments were happy to consider Ukraine as part of Russias legitimate sphere of influence. And the countrys opaque politics and extraordinary levels of corruption provided them with a useful justification for condemning Ukraine to this fate."

The EU is seeking an increasingly close relationship with Ukraine, going beyond mere bilateral co-operation, to gradual economic integration and a deepening of political co-operation. Ukraine is a priority partner country within the European Neighbourhood Policy (ENP) and the Eastern Partneship (EaP). The Partnership and Co-operation Agreement (PCA) which entered into force in 1998 and provides a comprehensive and ambitious framework for cooperation between the EU and Ukraine, in all key areas of reform.

Ukraine's President Petro Poroshenko signed a landmark trade and economic agreement with the European Union in Brussels 27 June 2014, and said he would decide later whether to extend the unilateral cease-fire he announced a week earlier in the military campaign against pro-Russian separatists. Poroshenko said Ukraine had paid "the highest possible price" to sign the free trade agreement with the EU, which he called "historic."

Poroshenko said September 25, 2014 his country will apply for membership in the European Union in 2020 as part of a broader plan for social and economic reforms. Poroshenko said the planned reforms, consisting of 60 separate initiatives, will prepare Ukraine to join the 28-nation bloc. "Anti-corruption reform, judicial reform, reform of the defense system, decentralization of power, energy independence are the priorities," said Poroshenko. He said he hoped that legislative elections set for October 2014 would result in a pro-reform parliamentary majority.

At the Paris Summit in September 2008 an agreement was reached to start negotiations on an EU-Ukraine Association Agreement, which is to be the successor agreement to the PCA. Several negotiating Rounds have since been organised, alternately in Brussels and Kiev (see: 4th Joint Progress Report on Negotiations on the Association Agreement ). In November 2009, the Cooperation Council adopted the EU-Ukraine Association Agenda which was subsequently updated in 2011. This Agenda replaces the former Action Plan , and will prepare for and facilitate the entry into force of the new Agreement. In view of the current level of the EU-Ukraine relations, the EU-Ukraine Cooperation Council endorsed the updated version of the EU-Ukraine Association Agenda on June, 24th, 2013.

At the 15th Ukraine-EU Summit of 19 December 2011, the EU leaders and President Yanukovych noted that a common understanding on the text of the Association Agreement was reached. On 10 December 2012, the EU Foreign Affairs Council adopted Council conclusions on Ukraine which affirmed the EUs commitment to signing the Agreement (inc. DCFTA) as soon as there is determined action and tangible progress by Ukraine on the benchmarks contained in the Conclusions.

On 15 May 2013, the EU Commission adopted, without prejudice to a future political decision on possible signature, the proposals for Council Decisions on the signing and provisional application as well as the conclusion of the EU-Ukraine Association Agreement, was transmitted to the Council for further processing. With this important decision, the EU took a necessary preparatory step in order to be technically ready for the possible signing of the Association Agreement (inc. DCFTA) at the Eastern Partnership Summit in Vilnius in November 2013.

In a specific statement, the EU Commission also took the view that the signing of the Agreement remains conditional on determined action and tangible progress by Ukrainian authorities on all of the benchmarks set out by the 10 December 2012 Council Conclusions. Therefore, the Commission, together with the EEAS, will continue to monitor Ukraine's progress.

The Association Agreement will significantly deepen Ukraines political association and economic integration with the EU. As Ukraine became a member of the World Trade Organisation (WTO) in May 2008, negotiations on the establishment of a Deep and Comprehensive Free Trade Area (DCFTA) could be launched, as an integral part of the Association Agreement.

In November 2013, the European Union and Ukraine were scheduled to sign Association and Free Trade Agreements, which would lead Ukraine to move further from Russias sphere of influence. Russia is trying to prevent this development but some experts say its methods are backfiring. To sign the Association and Free Trade Agreements with the European Union, the Ukrainian parliament had to adopt legislation to bring the country's laws into compliance with European standards. The EU also demanded an end to politically-motivated prosecutions and the release of former Prime Minister Yulia Tymoshenko. Despite a ruling by the European Court of Human Rights that her right to a fair trial was violated, she remained in jail on abuse of power charges.

Tymoshenko, with her trademark golden peasants braid, is the darling of some Europeans. But she is the devil to Ukraines president. He narrowly lost to her coalition in the 2005 presidential election, and narrowly beat her in the 2010 presidential election. The next year, she was convicted of embezzlement and abuse of power and sentenced to seven years in jail. Now the EU said: Free Yulia, or no trade deal. Germany said it will take her in. Tymoshenko said she will go. A pro-Yanukovych newspaper carried a Tymoshenko photo with the headline: Guten Tag, Berlin! But Yanukovych fears that Tymoshenko will return to Ukraine to run against him in the 2015 presidential election.

About one quarter of Ukrainian trade is with Russia. Russia, striving to keep Ukraine in its orbit, offered an alternative: joining the Customs Union. Ukraine would not need to fulfill any requirements and will enjoy free trade with Russia, Belarus and Kazakhstan, and pay lower prices for Russian natural gas. In August 2013, Russia blocked imports from Ukraine. Some goods suddenly failed to satisfy Russian safety and quality standards or had other difficulties passing through customs.

According to one 2013 poll, 41 percent of Ukrainians supported joining the EU and 31 percent were in favor of the Customs Union. In a poll from October 2013, 45 percent of Ukrainians favored the association agreement with the European Union. This was three times greater than the 14 percent who wanted to join the Moscow-led economic bloc.

The Kremlin warned Kiev that it would be subject to a harsh new customs regime if it signed the EU agreements, and has also demanded prompt payments for huge natural gas bills. Russia threatened to limit the import of Ukrainian goods, particularly from the eastern regions that constitute the Ukrainian presidents support base. Such a Russian move would have cost Ukraine heavy financial losses and caused the closure of companies where thousands of people work.

Ukraine sent shockwaves through Europe when it announced a halt to preparations for association agreements with the European Union. Ukraine's Cabinet said 21 November 2013 it was suspending preparations to sign the historic trade and cooperation agreement with the EU, after the country's parliament earlier in the day refused to pass legislation that would free jailed former prime minister Yulia Tymoshenko. The former prime minister's release was a key EU condition for signing the Association Agreement with Ukraine. Ukraine's prime minister Mykola Azarov said the suspension of the preparations for signing the pact was in the interests of "national security." He also said the decision not to sign a landmark deal strengthening ties with the European Union was based on economics, and that the move does not alter Ukraine's strategy of EU integration. The suspension order said Ukraine would resume an "active dialogue" with Belarus and Kazakhstan, members of a Russian-led customs union, and other former Soviet states with the goal of reviving trade and economic relations.

The Ukrainian and European parliaments simultaneously ratified Ukraines Association Agreement with the European Union on 16 September 2014. Ukrainian President Petro Poroshenko called the unanimous vote a first, but very decisive step toward bringing Ukraine into European Union membership. The agreement establishes a deep political association and free-trade area between Ukraine and the EU. However, the EU and Ukraine agreed on September 12 to delay implementation of the free-trade pact until the end of 2015 in a concession to Russia, which has pushed Kyiv to join a Russian-led Eurasian customs union.




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