Relations Ukraine-EU at the modern stage: problems and prospects

EU relations with Ukraine are based on a variety of agreements, the most important of which are the Partnership and Co-operation Agreement (PCA), which entered into force in 1998, and the EU-Ukraine Action Plan, adopted in February 2005.
Both sides have clarified their position towards each other in internal political strategies. On the EU side, the basic approach to relations with Ukraine was laid down in the Common Strategy of 1999. For Ukraine, the President’s Strategy for European Integration of 1998 has repeatedly been confirmed by former President Kuchma and received support from the Parliament. President Yushchenko declared European Integration a strategic priority of Ukraine, a course reflected by the creation of the post of Deputy Prime Minister for European Integration in the new government.

A number of specific agreements in the fields of trade, science and technology, and nuclear energy are also in place.

Technical assistance has been provided since the early 1990s in support of the transition process towards democracy and market economy, through the TACIS programme.

The Partnership and Cooperation Agreement (PCA)

Ukraine was the first country of the former Soviet Union to conclude a PCA with the European Union in June 1994. After ratification by Ukraine, the EU and its member states, the PCA came into force in March 1998. It highlights respect for shared fundamental values as an essential element for the relationship; provides an appropriate framework for political dialogue; sets the principal common objectives in terms of harmonious economic relations, sustainable development, co-operation in a number of areas, and support to Ukraine’s efforts towards democracy; as well as creating an institutional framework for pursuing these goals.

The PCA is an important instrument in bringing Ukraine in line with the legal framework of the single European market and of the WTO system. It also contains a number of evolutionary clauses, including the prospect of establishing a free trade area.

A Protocol to the PCA was signed by the EU and Ukraine on 30 March 2004 to extend the application of the agreement in full to the 10 new EU Member States from 1 May 2004.

The Institutional Framework

The PCA establishes a number of bilateral institutions and provides the basis for taking further decisions as necessary:

· Co-operation Council at ministerial level (EU-Presidency, European Commission, High Representative, Government of Ukraine)

· Co-operation Committee (senior civil servants level, chaired alternately by the European Commission and the Ukrainian side)

· Sub-Committees (experts level; supporting the work of the Co-operation Committee).

The political dialogue is conducted through yearly Summits, at the Co-operation Councils, and in Ministerial and Political Directors meetings in the Troika format. EU-Ukraine Summits: The Hague, 8 July 2004; Kiev, 1 December 2005; Helsinki, 27 October 2006.

The EU Common Strategy on Ukraine

The EU Common Strategy was adopted in December 1999 at the Helsinki European Council in response to the recognition that more coherence was needed between the EU and the Member States’ policies vis-à-vis certain partner countries. It covers a period of four years. The Strategy aims at developing a strategic partnership between the EU and Ukraine on the basis of the PCA, while acknowledging Ukraine’s European aspirations and welcoming the country’s European choice. It sets three principal objectives:

· to support the democratic and economic transition process in Ukraine;

· to meet common challenges on the European continent (stability and security in Europe, environment protection, energy and nuclear safety);

· to strengthen co-operation between the EU and Ukraine in the context of enlargement; assist Ukraine’s integration into the European and world economy; enhance co-operation in the field of Justice and Home Affairs.

Upon completion of Country Reports for seven ENP countries, including Ukraine, joint Action Plans were negotiated. Consultations with Ukraine on a European Neighbourhood Action Plan were launched in January 2004 and concluded in September 2004. The Action Plans will be the main tools for ENP implementation.

In December 2004, the Council, on the basis of a proposal from the Commission, agreed to the content of the Action Plan and decided to forward the Action Plan to the EU-Ukraine Cooperation Council as soon as developments in Ukraine, including the conduct of democratic presidential elections, would make it possible to envisage implementation of its provisions. The European Council, also in December 2004, stated that the EU aims to strengthen and enhance relations with Ukraine, making full use of the Action Plan.

The EU-Ukraine Action Plan was jointly adopted at a special Cooperation Council on 21 February 2005. The Action Plan provides a comprehensive and ambitious framework for work with Ukraine, identifying all the key areas of reform. The Action Plan is highly versatile. The quality and duration of implementation will depend on Ukraine’s continued commitment to common values, its capacity to implement jointly agreed priorities and effective bilateral cooperation and coordination. Moreover, in light of Ukraine’s new political circumstances, the High Representative/Secretary General Solana and Commissioner Ferrero-Waldner proposed efforts to maximise the ENP benefits for Ukraine in the course of implementation of the Action Plan. These proposals were confirmed in the 21 February 2005 Council Conclusions, which set out ten points for closer co-operation:

Ten Points for Closer Co-operation

Specifically, the Council has agreed on the following measures in support of a democratic and reform-oriented Ukraine:

1) to initiate early consultations on an enhanced agreement between EU and Ukraine, as soon as the political priorities of the ENP Action Plan have been addressed.

2) to explore possibilities for closer co-operation in the area of foreign and security policy, including European Security Defense policy, particularly with regard to Transnistria. Ukraine will also be invited, on a case by case basis, to align itself with EU positions on regional and international issues.

3) to deepen trade and economic relations between the EU and Ukraine. The review of the existing feasibility study on establishing a Free Trade Area between Ukraine and EU will be accelerated with a view to enable an early start to negotiations once Ukraine has joined the WTO. The EU is also moving quickly on agreements that will provide access to EU markets for Ukraine’s steel and textiles exports – which between them make up 30% of Ukraine’s exports to the EU. An EU-Ukraine steel agreement is under negotiation; an EU-Ukraine textile agreement was adopted by Council this week.

4) to lend further support to Ukraine’s WTO accession and to offer Ukraine continued assistance in meeting the necessary requirements. The EU was one of the first partners to conclude its bilateral protocol with Ukraine in March 2004, whereas negotiations with certain other key WTO members continue.

5) to intensify ongoing contacts with Ukraine to help it resolve the outstanding issues relating to the granting of “market economy status”.

6) to intensify negotiations regarding visa facilitation, taking into account security aspects, with a view to opening negotiations before the next EU-Ukraine summit in October. In this context, progress in the ongoing negotiations on an EC-Ukraine readmission agreement will remain essential.

7) to enhance co-operation in key sectors, including energy, transport, the environment, as well as private sector development. Preparations will be made for a high level dialogue on energy and related issues and the environmental dialogue will be upgraded. Ukraine will be treated as a priority country in the ongoing preparations for the extension of Trans-European Networks.

8) to step up support for Ukraine’s legislative approximation process, including with instruments borrowed from the Enlargement process such as TAIEX and Twinning.

9) efforts in the fields of democracy and rule of law will be an immediate imperative and further targeted assistance including support for strengthening of civil society is envisaged.

10) to maximise access to funding from the European Investment Bank (EIB), making up to 250 million of EIB lending available to Ukraine, and provide increased financial assistance to Ukraine through the relevant instruments in order to help Ukraine to pursue its reform process.