Is Ukraine en route to the Union?

By Marius Vahl

Date: 10/03/05

The date of 21 February 2005 was a watershed in relations between Ukraine and the EU. As part of the EU's European Neighbourhood Policy (ENP), the two sides adopted an action plan to strengthen their bilateral relationship and a 'List' of ten additional measures to further strengthen and enrich the action plan. Whereas the plan was negotiated between the EU and the regime of the then president Leonid Kuchma and finalised before the presidential elections, the List in effect constitutes the EU's response to the Orange Revolution.

It has already been criticised as being only cosmetic and lacking anything new. Many of the items on the List are essentially reformulations of the corresponding items in the action plan. This applies for instance to EU support for Ukraine's accession to the World Trade Organization (WTO) and the language used on enhanced co-operation in foreign and security policy, although the proposal to invite Ukraine to associate with EU declarations on foreign and security issues is not mentioned in the action plan.

The List implies giving a greater intensity to the process of deepening EU-Ukraine relations. On trade and economic relations, work on liberalisation of trade in steel products and textiles and contacts to enable Ukraine to be granted market economy status, will be "intensified", the review of the possibility of free trade will be "accelerated", and the EU will "step up" support to Ukraine for approximation to EU legislation.

Other items on the List represent important concessions by the EU. While the action plan calls for "a constructive dialogue on visa facilitation with a view to preparing for future negotiations on a visa facilitation agreement", the List calls for consideration of options to facilitate the granting of visas in connection with "negotiations to be held before the next EU-Ukraine summit".

A commitment to the conclusion of a new upgraded agreement has been a key item on Ukraine's wish list. In the first EU proposals in March 2003, full implementation of the existing Partnership and Co-operation Agreement (PCA) was considered a "necessary pre-condition for any new development". Only then would the EU consider any new agreements that would build on and supplement existing contractual relations.

But progress on some of these key issues depends on a number of specified conditions carried over from the action plan. "Early consultations" on a new enhanced agreement will thus take place only after the '"political priorities" of the action plan are addressed. The granting of market economy status needs a number of issues including price-formation and control of state aid in Ukraine to be resolved. As in the action plan, it is emphasised that progress in negotiations on a readmission agreement is "essential" for an agreement on visa facilitation.

The List also uses language which implies that Ukraine is to become a priority for the EU. On the issue of people-to-people contacts, Ukraine is to be given "priority access" to the Erasmus Mundi student exchange programme and a special internship programme for young Ukrainians will be considered. Relations will be strengthened in key sectors through the establishment of a high-level energy dialogue, an upgrade of the environmental dialogue and by making Ukraine a priority in the planned extension of the Trans-European Networks.

A similar conclusion can be drawn from the provision calling for up to é250 million in loans to be made available to Ukraine from the European Investment Bank (EIB). This constitutes half of the total EIB funding available to the members of the Commonwealth of Independent States (CIS). It represents a clear shift in EU priorities towards Ukraine and away from other CIS countries such as Russia, previously the only CIS country to receive EIB financing.

In the wake of the Orange Revolution, Ukraine is not only catching up with Russia, but moving ahead in terms of its relationship with Brussels. The continued absence of agreement on a 'Road Map' for the four bilateral 'common spaces' to be developed between the EU and Russia - the equivalent of the action plan between Ukraine and the EU - further highlights this important development.

Many in the EU conclude that this is a miserly response to the dramatic events in Ukraine in late 2004 and a new Ukrainian government determined to move towards EU membership. A majority within the EU, however, remains of the opinion that it is too early to acknowledge Ukraine's membership aspirations. If the new Ukrainian government follows through on its planned reforms, this position is likely to become increasingly unsustainable.

• Marius Vahl is a research fellow at the Centre for European Policy Studies (CEPS). www.ceps.be

Analytical feature on EU-Ukraine relations, in particular the changes which were made to the EU-Ukraine Action Plan after the Orange Revolution in late 2004.