Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

Skip to comments.

Ukraine outrage over delay on EU trade deal
Ahram Online ^ | Monday 15 Sep 2014

Posted on 09/15/2014 11:35:48 AM PDT by McGruff

Ukrainian President Petro Poroshenko is facing a backlash from his staunchest supporters for bowing to Russian pressure and postponing the implementation of an EU trade deal the two sides plan to ratify Tuesday.

Some warned the decision to delay the ex-Soviet state's economic tilt westward could spark a repeat of the deadly EuroMaidan protests that toppled Kremlin-backed Viktor Yanukovych three months after his November rejection of the same pact.

"I am speechless," central Dnipropetrovsk region deputy governor Svyatoslav Oliynik wrote in a Facebook post. "The last time this happened, we had EuroMaidan."

And Deputy Foreign Minister Danylo Lubkivsky cautioned after submitting his resignation that Poroshenko was sending "the wrong signal to everyone: the aggressor (Russia), our allies and, most importantly, the citizens of Ukraine."

But most analysts agree the threat of a furious Russia unleashing crippling trade restrictions on Ukraine that would sink its economy even further had left the staunchly pro-Western leader with little choice.

The free trade deal -- now not set to come into effect until 2016 -- is part of a broader Association Agreement the EU and Ukrainian parliaments are expected to ratify after years of negotiations that often verged on collapse.

Russian President Vladimir Putin had repeatedly tried to torpedo the talks out of fear that Ukraine would slip out of Moscow's orbit and ruin his dream of a post-Soviet bloc rivalling the European Union and NATO.

Following Yanukovych's rejection of the EU agreement last year, just days before it was due to be signed, Putin rewarded Ukraine with a $15-billion (11.5-billion euro) lifeline and slashed its gas price.

Ukraine's decision later to press on with the EU pact saw Moscow respond with a threat to ban most Ukrainian goods should the trade agreement enter into force this November as planned by Brussels and Kiev.

That grim scenario seemed decisive in Ukraine's decision to request and receive EU permission Friday to put free trade on the back burner.

Russian Economy Minister Alexei Ulyukayev quickly announced that Moscow now "pledges not to adopt protective measures" until the end of 2015.

Poroshenko said in his defence Monday that he was able to secure the right to "protect Ukrainian producers, the federal budget, and a (stable) exchange rate that will avert capital flight in wartime conditions."

But Prime Minister Dmitry Medvedev said Russia would be watching closely to make sure "there is no hidden implementation of these (free trade) rules". Analysts believe Russia always had the upper hand in the trade debate because its restrictions would have delivered immediate pain on Ukraine.

About a quarter of Ukraine's exports go eastward -- the same as in the opposite direction to the 28 EU member states. But the benefits of free trade with Europe would not be felt for up to a decade because the pact sets aside a "transitional period of a maximum of 10 years".

It also requires Ukraine to end its agricultural subsidies programme and bring down import barriers which help steel workers in the restive Russian-speaking east.

Putin warned Poroshenko last week that Ukraine's transition to EU trade standards would cost his country 165 million euros ($213 billion) -- a figure far outstripping its 2013 gross domestic product.

The European Union tried to cushion the blow by immediately lifting most tariffs on Ukrainian products and offering Kiev a 1.6-billion-euro economic assistance package. But even Brussels conceded the relaxed customs rules woul d only save Ukrainian exporters 500 million euros a year.

The limited trade restrictions Russia has already imposed on some Ukrainian food saw those exports alone shrink by a third in the first six months -- a loss that would reach at least 775 million euros on the year.

"The current state of the Ukrainian economy is such that the shocks (of Russian trade sanctions) dealt some industries such as engineering would simply be too much for the country to bear," incoming EU Commission vice president Valdis Dombrovskis told Kiev's Evropeiska Pravda news site.


TOPICS:
KEYWORDS:
Trouble in paradise?
1 posted on 09/15/2014 11:35:48 AM PDT by McGruff
[ Post Reply | Private Reply | View Replies]

To: McGruff
Ukrainians were like young, naïve children, thinking that EU will take them in and pay all their expenses. Reality is different - every player on the global arena will gladly sell them for a minute profit. Even Turkey, an associated EU member since 1963 (the Ankara Agreement) is not going to be accepted into EU as a full member any time soon (IMO, never.) Ukrainians should have been far more cynical. It may also be that Yanukovich was right in refusing to sign the document - if he was smart enough to calculate the consequences (though I doubt that, he is just a common criminal with no brains.)

EU and Russia have significant trade; EU and Ukraine don't have anywhere that much - and in light of destruction of Ukrainian economy the trade has to become one-sided. "Nothing personal, " as the villain often says as he dispatches an inconvenient man. EU is willing to use Ukraine as a reason to push trade sanctions that may have their own value to EU. But EU will never go to war for Ukraine, and EU will not even risk their own interests in a purely political battle. Ukraine simply doesn't have much to offer EU in exchange for all the losses that EU is already taking in.

This delay (until 2016) in implementation of the agreement means that the current government in Kiev will most likely not survive until then. It may not even survive this winter. This is all part of the plan, however cynical it may look like (because it is.) EU only wants to deal with a strongman who really is in control. The current team in Kiev is not even close to that.

2 posted on 09/15/2014 12:01:09 PM PDT by Greysard
[ Post Reply | Private Reply | To 1 | View Replies]

To: Greysard
EU only wants to deal with a strongman who really is in control

Isn't the whole US-enabled and financed "spontaneous revolution" in Kiev something only Obama wants? Europe could easily have enough problems with ISIS spreading there, in areas that have been over-run by Muslims. Better to have Russia's strengh keeping the chaos from spreading into eastern Europe through the Black Sea, if Turkey gets weird.

Then there's the oil situation. Kiev's insistance on staying at odds with its Russian ethnics and with Russia is destabilizing to that oil source, at a time when mideast oil could go up in flames.

As usual, Obama's on the wrong side.....his own.

3 posted on 09/15/2014 12:12:15 PM PDT by grania
[ Post Reply | Private Reply | To 2 | View Replies]

To: grania
Isn't the whole US-enabled and financed "spontaneous revolution" in Kiev something only Obama wants?

Yes, if your tinfoil is adjusted "just" right.

4 posted on 09/15/2014 12:25:47 PM PDT by 1rudeboy
[ Post Reply | Private Reply | To 3 | View Replies]

To: grania
Isn't the whole US-enabled and financed "spontaneous revolution" in Kiev something only Obama wants? Europe could easily have enough problems with ISIS spreading there, in areas that have been over-run by Muslims.

Europe is behaving either irrationally, or they have a rationale that eludes me. The Libyan war alone is a good example. Perhaps handling of this crisis in Ukraine will be another example. NATO is said to start delivering weapons to Ukraine to further inflame the civil war. There must be a reason for this.

5 posted on 09/15/2014 12:46:19 PM PDT by Greysard
[ Post Reply | Private Reply | To 3 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson