EU promises early benefits for Ukraine, Georgia and Moldova from trade and political agreements.
Georgia and Moldova will tomorrow (27 June) sign potentially far-reaching trade and political agreements with the European Union, designed to ease their access to EU markets and to deepen their political relationship with the EU.
Ukraine signed the political half of the same ‘association’ agreement on 21 March. Its new president, Petro Poroshenko, will sign the trade element of the agreement at the same ceremony.
The EU has brought forward the signature of the association agreements with Georgia and Moldova, which were initialled last November, partly because Russia’s annexation of Ukraine’s Crimean peninsula has spurred the two countries to complete the process.
Ukraine initialled the association agreement, including the accompanying deep and comprehensive free-trade agreement (DCFTA), in March 2012. It was the decision by then president Viktor Yanukovych not to follow up by signing the agreement that led to months of protests, resulting in February in his decision to flee Kiev.
Ratification of the agreements by the EU’s 28 member states may take several years, so the EU says it will unilaterally introduce tariff reductions and other measures in the agreement when some institutional formalities are resolved. It hopes to apply the association agreements provisionally by November, the expiry date for some trade privileges already given last April to Ukraine.
Yanukovych’s decision not to sign the association agreement was preceded by Russian pressure that included measures against Ukrainian exporters. Igor Shuvalov, one of Russia’s deputy prime ministers, on Monday (23 June) raised the possibility of new measures against Ukraine, telling journalists: “We have a possibility of imposing customs-tariff measures at Russian government level”.
Russian threats
Russian arguments that Ukraine’s trade deal could harm its economy led in January to the opening of technical talks between EU and Russian trade officials. After two meetings, the European Commission has agreed to upgrade the technical consultations to political talks as from July, and to include a Ukrainian minister. A senior EU official said that the decision to hold trilateral political talks was “a gesture of good faith [viewed] as helpful for the dialogue”.
Russia has also indicated that Moldova’s DCFTA with the EU may clash with its free-trade agreement with the grouping of post-Soviet countries, the Commonwealth of Independent States (CIS), which could lead to restrictions on Moldovan exporters. The EU official described that claim as “deeply shocking”, saying: “If we took this view of countries that sign free-trade agreements, we would not be talking to many people.”
Companies in Crimea, which Russia has annexed, will not be able automatically to take advantage of the lower tariffs. On Monday (23 June), the EU banned imports of goods from Crimea, unless authorised for export by authorities in Kiev. The legal conditions of the association agreements with Georgia and Moldova are also complicated by territorial divisions. Companies from Transdnistria, a breakaway region of Moldova, and from Abkhazia and South Ossetia – two self-declared republics that emerged from wars with Georgia – will be able to enjoy the EU’s free-trade privileges only if they secure approval from authorities in Chisinau and Tbilisi.
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