Ukraine signs ‘historic’ free-trade deal with EU

THE IRISH TIMES  (Reuters/PA    First published: Fri, Jun 27, 2014, 09:36)

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Georgia, Moldova sign similar agreements as Russia warns of ‘grave consqeuences

Ukraine signed a historic free-trade and political cooperation agreement with the European Union today that has been at the heart of the country’s political crisis, drawing an immediate threat of “grave consequences” from Russia.

Ex-USSR states Georgia and Moldova signed similar deals, which fall short of full EU membership but hold out the prospect of deep economic integration and unfettered access to the EU’s 500 million citizens. It signals a turning away from Russia and moving closer to the West.

“Over the last months, Ukraine paid the highest possible price to make her European dreams come true,” Ukrainian president Petro Poroshenko told EU leaders at a signing ceremony in Brussels.

He said it may be the “most important day” for his country since it became independent from the Soviet Union.

“It’s absolutely a new perspective for my country,” Mr Poroshenko said.

Before the signing, Mr Poroshenko brandished a pen, saying it was the same pen Mr Yanukovych was supposed to use the sign the Association Agreement at the EU summit in Vilnius, Lithuania, last autumn.

“Historic events are unavoidable,” he said.

Russia immediately said “grave consequences” would follow. The Ukraine deal is the culmination of months of upheaval and signals a historic split with Russia.

Kremlin spokesman Dmitry Peskov said Russia would take measures to protect its economy if it is negatively affected by Ukraine, Georgia and Moldova’s signing of agreements with the European Union, RIA news agency said.

European Council President Herman Van Rompuy said there was nothing in the agreements that would harm Russia in any way.

Mr Van Rompuy said the agreements with the three countries were “not the final stage of our cooperation”, but this fell short of the prospect of ultimate EU membership.

Moldovan prime minister Iurie Leanca has also set his sights on EU membership, saying yesterday that he hoped his country would apply to join in the second half of 2015.

Russia, which fought a five-day war with Georgia in 2008, has met previous attempts by its neighbours to move closer to the EU with trade reprisals and EU officials fear the same thing could happen again. EU officials say that, in diplomatic talks,

Russia has threatened to withdraw the duty-free treatment that Ukraine currently benefits from as a member of the Commonwealth of Independent States (CIS) free trade pact.

One senior EU official called the Russian threat “deeply shocking” while another said such a move would violate the CIS agreement and World Trade Organi

Businesses in the three countries whose goods and practices meet EU standards will be able to trade freely in any EU country without tariffs or restrictions. Likewise, EU goods and services will be able to sell more easily and cheaply to businesses and customers in Ukraine, Georgia and Moldova.

Perhaps more important than the trade deal is an accompanying 10-year plan for Ukraine to adopt EU product regulations. Such rules are important because they ease the way for international trade beyond Europe.

The deal also demands that Ukraine change the way it does business. Adopting EU rules on government contracts, competition policy and the copyright for ideas and inventions should improve the economy by making it more investor-friendly and reducing corruption.

Ukraine’s former pro-Moscow president Viktor Yanukovich turned his back on signing the EU agreement last November in favour of closer ties with Moscow, prompting months of street protests that eventually led to his fleeing the country.

Soon afterwards, Russia annexed Ukraine’s Crimea region, drawing outrage and sanctions from the United States and EU