EU set to grant Ukraine market economy status

By Andrew Beatty

Date: 13/01/05

The European Commission is poised to declare Ukraine a "functioning market economy" following last month's dramatic change of government in Kiev, European Voice has learned.

The decision, which could come in time for a visit from President Viktor Yushchenko to Brussels next month, is said to be part of a series of moves to deepen ties with Kiev following the country's democratic elections.

After weeks of street protests and an election campaign marred by government interference, opposition candidate Yushchenko won the 26 December re-run of the presidential election.

The EU is now under pressure to respond to Yushchenko's European overtures.

Yushchenko is expected to press for deeper integration with the EU on 21 January when he sets out his government's priorities for the coming term.

Observers say the government needs to show ordinary Ukrainians that the EU is serious about deeper ties. After a four-year Commission investigation, diplomats now say that market status for Ukraine is "very probable" and could come within weeks.

The decision would ease anti-dumping duties on Ukraine's chief industrial exports, some of which are currently subject to tariffs of more than 50%.

But its symbolism may be as important as its monetary value. Russia's label as a market economy has long upset pro-Europeans in Kiev, while simultaneously placing Ukraine's heavy industries at a disadvantage vis-à-vis their Russian counterparts.

Ukraine officials say they are ready to make a host of other proposals to deepen ties.

"We are ready to present proposals when the EU is ready to talk," the head of the Ukraine's trade delegation in Brussels, Sergiy Kriuchko, said.

"If we are welcome here, let's talk business," he said.

But Brussels remains cautious and is keen to ensure that Yushchenko's election is a breakthrough and not just "a change of personnel".

During a meeting this week in Brussels, EU member states agreed not to go beyond the recently adopted 'European Neighbourhood Agreement', which is to be launched in February.

But the Commission and the EU's foreign policy chief Javier Solana have been asked to present foreign ministers with ideas on how to get the most out of the deal when they meet in Brussels later this month.

One Council of Ministers diplomat said: "There is agreement on the need to send Ukraine a message."

Diplomats say the recommendations could include putting Ukraine on a 'fast track' to membership of the World Trade Organization (WTO) - a policy backed by Washington.

Russia's accession to the WTO is likely to be dealt with in December at a ministerial meeting in Hong Kong and EU countries favouring closer ties with Kiev are pressing for Ukraine's accession to be addressed as well.

This could open the possibility of an EU-Ukraine free trade deal, which is also under consideration.

The EU is likely to offer talks on easing visa procedures for some Ukrainian diplomats and scientists. The prospects for students however remain unclear.

Yuschenko is expected to visit Brussels for talks with EU leaders on 21 February.

Article says that after the recent Presidential elections in Ukraine, won by opposition candidate Viktor Yushchenko, the EU is thinking about granting Ukraine the status of 'functioning market economy'. This move would be of both symbolic and economic value to the country.