Ukraine will ratify the EU Association Agreement with a careful eye to Russia

Ratification of the European Parliament Association does not guarantee Ukraine cloudless sky in its relations with Russia

Photo: Reuters

Next week Ukraine is planning to ratify the Association Agreement simultaneously with the European Parliament. Ratification of the AA by the Verkhovna Rada will allow for introducing temporary application of the agreement on the free trade zone with the EU starting November 1. However, the uncertainty of the economic policy of Europe towards Russia may have negative repercussions for Ukraine.

Customs dispute

Today, the trilateral talks on implementation of the AA agreement will be held with the participation of Russia. After two months of expert consultations, this will be a meeting between ministers, where Ukraine will be represented by Foreign Minister Pavlo Klimkin. The Russian side will be represented by Minister of Economic Development Alexey Ulyukayev. On the eve of the meeting he stated that the losses of Russian companies from the introduction of the free trade zone between Ukraine and the EU will amount to RUR 100 bn. “If we do not see proper understanding on the part of our partners and colleagues, we have mechanisms of protection of our producers from the existing risks,” warned Ulyukayev.

Noteworthy, the negotiations on minimizing the negative impact of the free trade zone between Ukraine and EU on the Russian economy started at the end of June, soon after Kyiv and Brussels signed the economic part of the AA. While Russia demanded that changes be made to the text of the agreement, its proposals were rejected. “The introduction of changes is unproductive. Moreover, the fact that the EU and Ukraine agreed to such consultations is a strategic error. It can be predicted with a 100% certainty that the consultations will be ineffective. The parties will “agree to differ”. Europeans and Ukrainians have no other way but to ratify the AA next week, otherwise it will open Pandora’s Box, which will destroy the whole system of the international contract law,” a member of Ukraine’s delegation at the negotiations with the EU in 2007-2010 Vadym Tryukhan told Capital.

A source of Capital in the Ministry of Foreign Affairs confirmed that during the latest expert consultations Russia no longer insisted on changes to the agreement, but proposed to postpone introduction of zero customs duties on a number items. “Officially, Moscow speaks about 144 items and there are also disputes on phytosanitary and veterinary control. All this is being done to delay the process of ratification,” he assured.

Former Ambassador of Ukraine to EU Roman Shpek also believes that the current talks with Russia will yield no results. He, however, predicts that the attempts to reach an agreement will continue immediately after ratification of the document by the VR. “The positions of German Chancellor Angela Merkel and European Commissioner for Trade Karel De Gucht, who assured that the actions of Ukraine should not inflict any damage to Russia, are not fully understood. We need to understand what is behind that. These high ranking officials must say how they see the possibility of a threat for the Russian economy from the Association Agreement,” specified the interlocutor.

Unpredictable Europe

A source of Capital in the Ministry of Foreign Affairs said the ministry has already submitted the package of documents required for ratification of the agreement with the EU to the presidential administration. It is expected that the document will be put to vote in the VR on September 16. According to the calendar plan of the parliament, this will be the only session of the VR this month. Earlier, the presidential administration promised to submit the documents to the VR in September, explaining deferral of the process by the desire to save UAH 560 mn for the budget. This is the amount of the estimated losses of Ukraine from the reduction of customs duties over two months.

Noteworthy, the session of the European Parliament will be held on September 15-18, where the Europeans plan to ratify the agreement with Ukraine. “It would have been logical for us to vote for the ratification of the agreement synchronously with the European Parliament,” emphasized the interlocutor in the Ministry of Foreign Affairs.

Enforcement of the free trade zone agreement depends on ratification of the AA by the VR. Currently, the EU unilaterally introduced a preferential regime for Ukrainian exports, while for the FTZ to begin operating the Ukrainian deputies must vote in favor of ratification of the AA. “I am sure we will have close to 300 votes and we will successfully ratify the agreement,” MP Oleksandr Bryginets (Batkivshchyna) told Capital.

In order for the agreement to enter into force, it must be ratified by all 28 EU member countries. Shpek believes there will be no problems with the ratification, although this process will not be fast. He sees risks for Ukraine in the uncertain policy of the EU towards Russia. “What is happening now with the agreement between Ukraine and EU is one of the results of poor quality policy of the EU and its certain member countries towards the Eastern region and Russia in particular. They do not have a strategic vision of what the relations between the EU and Russia should be,” believes Shpek.

Tryukhan says that right after ratification of the AA, the VR must pass the program of implementation of the AA. As of yesterday, the members of the parliament did not receive the documents for ratification of the agreement or for its implementation.