EU / Ukraine agreement - a health warning?
Friday 27 January 2012By Nick Powell
Ukraine’s politicians, even when they can agree on little else, want European integration.
They battle on despite the lack of enthusiasm often shown in EU capitals and the heavy price they pay in their relations with Russia. This was illustrated by Ukraine’s recent announcement that it will adopt EU standards for food quality control. The head of the state veterinary and biosecurity service of Ukraine, Ivan Bisiuk, said he was determined to follow the model of EU states, with controls stretching from animal feed and pesticides through to food sales to consumers.
Though doubtless this was welcome news to the European Commission, the first response came not from Brussels but from Moscow. Russia’s consumer rights and public health service warned that it would lead to problems for imports of Ukrainian agricultural goods. On the spurious grounds that human health should not be a matter for vets, the Russian public health chief, Gennady Onischenko, announced that from May there will be significantly tougher controls on the border with Ukraine.
There will be much more of this kind of behaviour by Russia as Ukraine seeks the ratification of its long sought association agreement with the EU. On December 19, at a summit in the Ukrainian capital Kyiv, Commission President Barroso hailed the successful conclusion of negotiations on the EU-Ukraine Association Agreement. It would be ready for initialling once the translations had been completed. Its centrepiece is the establishment of a deep and comprehensive free trade area that would bind Europe’s largest country to the EU. As President Barroso noted, it represents far more than a trade agreement, ‘it is about real economic integration and regulatory convergence’.
For Ukraine’s part, this represents a major act of faith. The country is committing itself to the EU in a quite unprecedented manner. In past such a commitment has always gone hand in hand with an offer of eventual membership of the Union.
To the immense frustration of successive governments, Ukraine has not yet been granted a membership perspective, however remote. Popular disillusionment with the 2004 Orange Revolution, which had apparently set Ukraine on a European path, was at least partly due to the reluctance in Brussels and other EU capitals to seize the initiative at that time. Viktor Yushchenko, who became President of Ukraine as result of the Orange Revolution, had gambled on a much more enthusiastic response. Instead he succeeded only in angering Moscow;
Russia demanded that Ukraine paid market prices for its gas imports. Previously cheap gas had been exchanged for low tariffs on the pipelines through Ukraine that transport gas to central Europe. When Russia cut the gas supplies, Ukraine came under enormous pressure from the EU to resolve the crisis. The Prime Minister, Yulia Tymoshenko, was a more realistic politician than Yushchenko. She knew she had to cut a deal. A situation that had strained relations with both Brussels and Moscow put her in a weak negotiating position.
The 2009 deal would lead to Ukraine paying above world prices for its gas and allow Russia to claim that there could be no cuts in the amount of gas as the high price forced Ukraine to improve its energy efficiency and seek alternative supplies. Talks about a new deal are dragging on, as Ukraine seeks to get a better price than the current $416 per 1,000 cubic metres and to nearly halve its imports of gas from 52 to 27 billion cubic metres. Ukraine’s negotiating position has been undermined by the construction of new pipelines that bypass Ukraine.
Ukraine would like to increase both Russian and EU commitment to its pipelines, with investment in the network by companies from other European countries as well as the Kremlin-controlled Gazprom. Russia prefers a Gazprom takeover, offering $4 billion for pipelines valued by Ukraine at $15 billion. As for a better price, that’s linked by Russia to Ukraine joining a customs union with Russia.
There are two other members of the customs union. One is Belarus, which is in the position that Moscow wishes for Ukraine. It is a pariah state as far as the EU is concerned and so is highly dependent on Russian goodwill. The other is Kazakhstan, where much of the gas is actually produced. Full membership of the customs union is incompatible with an EU-Ukraine deep and comprehensive free trade area Tymoshenko is now in jail, convicted of exceeding her authority in the gas negotiations. From prison, she has called for the EU to press ahead with ratifying the association agreement. She argues that the priority should be to prevent Ukraine seeking an alternative agreement with the Russian-led customs union. She also wants Ukraine to get back on the road to European political and judicial norms, which of course include not jailing politicians for their alleged mistakes in office.
President Viktor Yanukovich, who defeated Tymoshenko in the election to succeed Yushchenko, is not in any hurry to free her by changing Ukraine’s Soviet-era laws. It is worth noting that Viktor Yushchenko testified against his former Orange Revolution ally at her trial.
The European Commission and many EU politicians show every sign of feeling guilty about Yulia Tymoshenko’s fate. After all, they were mightily relieved when she signed that gas deal in Moscow. They may have to wait –as will she- until after the Ukrainian parliamentary election this autumn before there are legal moves to free her. In the meantime, Ukraine is ready to embrace the trade agreement, despite the inevitable short-term economic pain as businesses and markets adjust to European competition. T
his reflects a belief across most of the political spectrum in Kyiv that a membership perspective must eventually come, that the EU cannot indefinitely exclude the largest country wholly in Europe and pretend that the continent stops where Stalin drew the Soviet Union’s border.