Alexander Okhrimenko

President of the Ukrainian Analytical Center, Ph.D. in Economics, on the economy and business, latest trends and forecasts.

Ukraine now can easily sign the Association Agreement with the EU. If there are no technical objections on the part of the EU, Ukraine can sign the Association agreement as soon as in February-March 2014 and begin its way towards European integration.

The main reason, having made Ukraine take a break in the Association agreement signature with the EU, is the problems occurring with Russia. They started growing like a snowball as soon as it had become known that Ukraine was about to sign the Association agreement. Russia showed concern because goods from the EU would be supplied through Ukraine and the system of Russia’s market protection against goods from the EU would be breached. That is why Russia quite negatively regarded the text of the Association agreement between Ukraine and the EU. Eventually, Ukraine managed to reach an agreement with Russia and lift the most painful issues concerning export and reexport of goods from Ukraine to Russia.

As a result of the negotiations between Viktor Yanukovych and Vladimir Putin in Moscow, 14 agreements have been signed, mostly concerning customs clearance of goods moving from Ukraine to Russia, and also issues dealing with production cooperation between Ukraine and Russia. Ultimately, Ukraine has lifted all controversial questions in relations with Russia and now Ukraine will be able to supply goods to Russia under normal conditions – even after the signing of the Association agreement.

Certain mass media quite incorrectly stated that Ukraine was joining the Customs Union. In fact, the agreements, signed in Moscow, in no way provide ground to state that Ukraine is joining or is going to join the Customs Union. In the given situation Russia no longer insists on Ukraine’s joining the Customs Union but believes it possible to cooperate in the framework of the bilateral agreements and according to the WTO rules.

It is expected that after the Association agreement signature between Ukraine and the EU, Russia can also derive its economic benefit as a business partner, first of all, due to joint ventures of Ukrainian and Russian businessmen. A whole number of big Russian companies and banks are already operating in Ukraine and the Association agreement will advance Ukraine to the EU and broaden the opportunities for the Russian capital.

By virtue of its geographical and economic peculiarities Ukraine aims at cooperation with both Russia and the EU. Ukraine’s economy cannot be orientated exclusively towards the EU or Russia. Everything is extremely intermingled and that is why cooperation can be only multilayered and diverse. That is exactly why Ukraine has to move in the course of its European integration with an eye on trade and business relations with Russia.

Statements by certain politicians that Ukraine has to break business ties with Russia for the sake of friendship with the EU look like simply baby talk as in this situation neither Russia nor the EU can decide the fate of Ukraine for itself. Ukraine cannot and will not break the ties, having been acquired over the decades. And the EU most likely does not need such sacrifice on the part of Ukraine. The main purpose of Ukraine and the EU’s cooperation is, first of all, the integration of our counties’ economies for the future. At the same time, any break of ties only damages the economy and does not allow it to function in the normal mode.

After the signing of the agreements between Ukraine and Russia the relations between Russia and the EU move to a new level where Ukraine’s role – is to act as a connecting link in this union.

 

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