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20th Aug 2022

Bad news on trade, but EU-Ukraine ties advance

  • EU flags at last year's Euromaidan. Putin: 'Is this a worthy fate ... for this beautiful country and its wonderful people?' (Photo: mac_ivan)

Russia on Monday (21 December) said No to EU ideas on resolving a Ukraine trade dispute. But in 2016, Europe will open its doors to Ukrainian exports and visa-free travellers.

Russia’s economic affairs minister, Alexey Ulyukaev, spent the whole day in Brussels with Ukrainian foreign minister Pavlo Klimkin and EU trade commissioner Cecilia Malmstroem.

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They met even though Russian leader Vladimir Putin, last week, and his prime minister, Dmitry Medvedev, on Monday morning, said Russia will, next year, impose trade sanctions on Ukraine no matter what.

Malmstroem said after Monday's event, the 20th of its type: “There wasn’t enough flexibility from the Russian side … this process is now over.”

She said most of Russia’s concerns “aren’t real”. She also said if Ukraine had bowed to Russia’s demands “it would have made the entry into force of the DCFTA impossible.”

The DCFTA - a free trade treaty - enters into life on 1 January, opening the EU market to Ukrainian exporters.

In strategic terms, it means aligning Ukraine’s economy with the single market in what authors of the pact call “accession-lite.”

In symbolic terms, it represents the fulfilment of last year’s “Euromaidan” revolution, in which dozens of Ukrainians died, amid protests flying EU flags, when Ukraine’s former regime rejected the trade accord.

Ukraine’s Klimkin told press in Brussels on Monday the Russia sanctions will mostly hit industrial exports.

Previous estimates say they could cost Ukraine $1.5 billion a year.

Malmstroem said Ukraine has already “factored in” the losses. But for Klimkin, the political value of the DCFTA is, in any case, higher than the Russia cost.

“Russia’s [DCFTA] concerns are politically motivated - it’s all about trying to keep Ukraine in Russia’s economic sphere of influence,” he said.

He gave examples of Russia’s demands, for instance, that Ukrainian railways should maintain Soviet-era standards for 10 years, and that Ukraine should hand over commercial secrets on EU transactions.

Russia sanctions

EU capitals, also on Monday, by written procedure, extended the life of Russia economic sanctions by six months.

They did it because even sanctions critics, such as Italy, say it's not complying with the “Minsk” ceasefire accord on Ukraine.

Klimkin said Putin “is in full control of Donbass [east Ukraine]. In every mercenary or other illegal unit there’s a regular Russian officer.”

He said violence is flaring up after a lull in October. He also said Russia is stockpiling weapons in the region and building military infrastructure.

He described Putin’s strategy as “creeping instability.”

He also said Russia is creating instability in Syria to sell it for concessions from Western states in other areas. “They’re trading in instability, like on a stock exchange,” Klimkin said.

'Visa-free is all'

There are irritants in EU-Ukraine relations.

Klimkin criticised Germany for building a new gas pipeline with Russia, Nord Stream II, bypassing Ukraine.

But looking back on 2015, he singled out visa-free travel as the brightest achievement. “Visa-free travel is all,” he told press in Brussels.

The European Commission, last Friday, said Ukraine satisfied criteria.

It did so even though Kiev hasn't met key anti-corruption conditions. It also did it despite the EU migration crisis.

Member states must still ratify the move. But the EU home affairs commissioner, Dimitris Avramopoulos, said on Friday he “doesn’t expect” anyone to block it.

He added “there are many” Ukrainian people “who’ve been waiting for a long time to see the green light from the European Union and now they have it.”

“The more they come, the more our open travel will prove itself very successful. They’re most welcome to cross the border of the European Union’s Schengen area.”

Schengen is a passport-free travel zone, which includes 22 EU states, as well as Iceland, Liechtenstein, Norway, and Switzerland.

Sour grapes?

EU-Russia visa talks are also frozen under EU sanctions.

For his part, Putin, on Russian TV on Monday, said he won't “pout over the sanctions” and that he’s open to future EU cooperation.

He said the US ordered the EU to impose the DCFTA in order to stop Russia creating its own trade bloc - the Eurasian Economic Union. He also urged EU states “not [to] just nod in agreement” to US “instructions.”

He said Ukraine’s pro-Western shift has put it “under external administration” and caused “drastically falling” living standards and “de-industrialisation.”

Asked to comment on Ukraine’s visa-free breakthrough, he said: “Is this a worthy fate and future for this beautiful country and its wonderful people?”.

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