Ukraine to benefit more from agt with Customs Union than with EU

Ukraine will benefit economically more if it signs an agreement on cooperation with the Customs Union, created by Russia, Kazakhstan and Belarus, than with the European Union, Eurasian Economic Community (EurAsEC) Deputy Secretary-General Sergei Glazyev said. He thinks, however, that Ukraine will sign an agreement with the EU. “In this agreement [with the EU] Ukraine acts as a colony that gives up its sovereignty in the field of trade policy, technical regulation and sanitary and veterinary control, i.e., state procurements and subsidies,” Glazyev told Ekho Moskvy radio on Saturday, September 7. He noted that if Ukraine signs an agreement with the EU, it will lose the status of trade and economic partner of Russia as it will have to discuss all issues concerning “trade regime, customs and technical regulation” directly with the EU leadership. Glazyev said Ukraine’s motives underlying its intention to sign an agreement with the EU were anti-economic even though the authorities were trying to justify their decision by references to the public opinion. However, the joint Russian-Ukrainian public opinion surveys indicate that about 36 percent of Ukrainians support the agreement with the EU and about 38 percent favour the country’s accession to the Customs Union. Ukrainian President Viktor Yanukovich said his country would continue to move along the road of European integration but would also develop relations with Russia and other Eurasian community countries. “Association with the European Union should become a stimulus for Ukraine to continue building a modern European state,” the president said. “At the same time, we should preserve and continue to deepen our relations and integration with Russia, Eurasian community countries and other world leaders and new centres of economic development. This is Ukraine’s choice. And we all bear responsibility for its realisation,” Yanukovich said. He said earlier this year that an association agreement between Ukraine and the EU would be signed at the Vilnius Summit this autumn as there “are all conditions” for signing the agreement before the end of 2013. European integration will be incomplete without Ukraine, he noted. “I am convinced that the united Europe project will be incomplete as long as such big European countries and nations as the Ukrainian people remain outside it,” he said. Ukraine understands that the EU is living through hard times, which makes it “extremely sensitive to prospects for further enlargement,” but integration in Europe “is directed towards greater economic stability and security and stronger European values,” the president said. “This is a movement towards stronger Europe,” he added. He also said that Ukraine is ready to accelerate technical preparations for the signing of the association agreement with the European Union. “We have basically begun implementing certain agreed-upon provisions of the agreement as part of the Association Agenda,” Yanukovich said. Ukraine is seeking to sign an association agreement with the European Union, which will reflect prospects for its membership in this organisation, the president said. According to Yanukovich, an agreement with the EU “should be meaningful and carry certain obligations, but partners in the European Union do not want to take our position into account.” “We are not asking for money, but we have one condition: this document should reflect prospects for Ukraine’s admission to the EU. If it’s not there, it [the agreement] is empty,” the president said. Speaking of broader ties with the European Union, Yanukovich said EU membership “is not a goal in itself” but a means of modernising Ukraine. “We want to integrate Ukraine into Europe,” he said, adding that this process should be bilateral. At the same time, Ukraine is discussing forms of cooperation with the Customs Union with each of its three member states - Russia, Belarus and Kazakhstan - separately. Customs Union countries are key trade partners for Ukraine. In 2012, trade turnover with them reached 63 billion U.S. dollars, making up 36 percent of Ukraine’s overall export. Ukraine has no status in the Customs Union now as there is no status of observer in this organisation. However, Yanukovich has already discussed his country’s possible participation in the Customs Union as an observer with the leaders of its member states. Ukrainian Prime Minister Azarov told the Russian television channel Mir in March that Ukraine could become a member of the Customs Union if it withdrew from the World Trade Organisation (WTO) or revisited its agreements with the WTO as part of its commitments to the Customs Union. “As an independent state Ukraine is bound by a number of international agreements. It joined the World Trade Organisation before Russia and we are now facing a very simple question: either we secede from the WTO and join the Customs Union or we should revisit our WTO agreements as part of our obligations in the Customs Union. All this is extremely difficult and barely productive,” Azarov said. He said Ukraine intended to become an observer in the Customs Union at first and then would gradually adapt itself to the new format of cooperation with its member states. Yanukovich said that Ukraine was looking for a model of cooperation with the Customs Union. He believes that the country can become an observer in the Customs Union and “find a formula that will correspond to the level of our relations.” “We are interested in this. In fact, the Customs Union countries are our strategic partners,” the president said. Yanukovich stressed that Russia is a “key country in the Customs Union.” Ukraine cannot ignore the existence of the Customs Union and should work out acceptable forms of cooperation with it, Yanukovich said. However he reiterated once again that European integration is a priority for Ukraine. However Russian First Deputy Prime Minister Igor Shuvalov said Ukraine could not be in the European Union and the Customs Union at the same time. “We think it will be impossible to create a common customs union with us on the terms that are put forth in this agreement [on association between Ukraine and the EU,” Shuvalov said after talks between Russian Prime Minister Dmitry Medvedev and his Ukrainian colleague Nikolai Azarov in late August. Shuvalov said he saw no prospects for further discussion on Ukraine’s contemporaneous membership in the EU and the Customs Union. “I think that further negotiations on this issue will be pointless,” he said.