The European Union’s trade commissioner told Global Atlanta Friday that the bloc will move ahead to offer Ukraine tariff benefits outlined within a scuttled political deal designed to enhance ties with the former Soviet republic.
Ukrainian President Viktor Yanukovych’s decision to postpone signing an association agreement with the EU in November caused widespread protests in Kiev, eventually leading to his ouster.
The unrest, which left more than 100 dead, has boiled over into a diplomatic standoff between the West and Russia as the latter has sent troops into Crimea, an autonomous region in eastern Ukraine with 60 percent ethnic Russian population and strong ties to the country. Tensions are running high ahead of a March 16 referendum in which Crimean citizens will vote on whether to leave Ukraine for Russia.
The EU and the broader international community, including the U.S., have condemned the proposed referendum as a violation of Ukrainian sovereignty and have threatened sanctions should Russia fail to remove troops from the region. Russia, meanwhile, has chosen not to recognize the government of interim Ukrainian prime minister Arseniy Yatsenyuk.
Karel De Gucht, the EU trade commissioner, said in Atlanta that he and his team in Brussels would work over the weekend to hammer out an agreement to enact the tariff benefits found in the Deep and Comprehensive Free Trade Agreement that was negotiated with the Yanukovych government. The DCFTA was to be enacted officially as part of the broader association agreement Mr. Yakunovych rejected.
If enacted, the European Commission deal would provide tariff benefits without requiring Ukraine to return the favor.
“The ones for Ukraine – we are going to put them in place unilaterally, which means that the whole agreement they have been fighting against – in practice, it will be realized,” he said.
Mr. De Gucht said he plans to present a proposal to the commission’s weekly college meeting in Strasbourg, France, Tuesday.
“We will go very quick with this,” he said, noting that he had been on two phone calls with Brussels before visiting the Georgia Institute of Technology to speak with professors and students Friday morning.
He said the EU had not been soft on Russia and that its position had not changed: Ukraine’s economy would benefit from more open trade with the 28-member union.
“Ukraine and [EU member] Poland at the time that the Berlin Wall fell had about the same income per capita. Now Poland has income per capita which is three times higher than in Ukraine, so now what we want to do is give Ukraine the opportunity to trade with us, be active in our markets – of course respecting our rules – because we believe that is the best way to develop that country.”
That said, European leaders “don’t mind” if Ukraine intensifies its close trade ties with Russia, Mr. De Gucht said. The only thing that would void the new tariff benefits would be entry into a customs union with Russia, something not even Yanukovych had agreed to, he said.
Mr. De Gucht drove home the fact that the original trade deal was negotiated with the Yanukovych government and initialed by both the EU and Ukraine.
“Even they were convinced that is good for their country, so it is them that have changed their position and not us,” said Mr. De Gucht, who has said that the deal would reduce tariffs on Ukrainian goods entering the EU by €487 million (more than $675 million) annually.
Mr. De Gucht was at Georgia Tech to outline the benefits of another trade deal – the Transatlantic Trade and Investment Partnership – for Georgia and the Southeast U.S.
While candid about the challenges of negotiating such a sweeping deal, he noted that it would reduce tariffs, harmonize standards and overall further integrate the world’s two largest economies, boosting both sides by billions of dollars annually .
He added that the pact is a chance for the U.S. and EU to set the agenda for a rules-based trading regime in the 21st-century global economy before they become less dominant players.