There can be no doubt that Ukraine is a European country.
And Article 49 of the Treaty of the European Union stipulates that
any European state may apply to become a member. Ukrainian
citizens and the Ukrainian government agree on their European
ambitions. Since 1996, Ukraine has repeatedly stated that it wants
to become a member of the European Union.
The European Union, however, has not shown much enthusiasm
over the prospect of admitting Ukraine, and the country has
never formally applied for EU membership. Numerous European
politicians, and even a few European Commissioners, have publicly
ruled out Ukrainian EU entry. Romano Prodi, the former President of the Commission,
famously argued that it would be just as impossible for Ukraine to join the
European Union as it would be for New Zealand.
But that was long ago, before the Orange
Revolution that swept Viktor
Yushchenko into the Presidency in December
2004. One of the revolution’s
central slogans was Ukraine’s “European
choice.” Now, Ukraine has a reasonable
chance to fulfill the three so-called
Copenhagen criteria for membership,
namely the embrace of democracy, a
market economy and the rule of law. It
will then be very difficult for the European
Union to refuse the country membership.
European reactions to the Orange
Revolution have said a great deal.
The most enthusiastic supporters of
Ukraine’s membership are the new EU
member states that lie near it, notably
Poland and Lithuania – not least because
no country wants to form the Union’s
Eastern outer border. The Scandinavian
countries and the Netherlands, traditionally
strong supporters of democracy,
also favor Ukrainian entry. The Netherlands,
as it happens, represents Ukraine
on the Executive Boards of the International
Monetary Fund and the World
Bank.
Britain and Sweden have always
been more interested in the enlargement
of the Union than its deepening, while in
Southern Europe, Italy, Portugal and
Greece have admitted substantial numbers
of Ukrainian migrant workers. Their
preference for Ukrainian workers over
immigrants from Africa makes them favorably
disposed toward Ukrainian
membership. The most resistant countries
are Germany, France and Belgium,
which prefer deepening to enlargement,
and Spain, which opposes any further
dilution of the funds it receives
from Brussels.
“A sizable majority of EU
members is now much
more favorable to
Ukrainian membership”
The upshot is that a sizable majority
of EU members now takes a much more
favorable view of Ukrainian entry.
Ukraine has already won a non-binding
sympathy vote in the European Parliament,
adopted by an overwhelming majority.
Officials at the European
Commission, however, are widely considered
to be among the least enthusiastic
about Ukrainian membership.
For President Yushchenko and the
new government under Prime Minister
Yulia Tymoshenko, Ukraine’s integration
into Europe is of critical importance.
The government even has a Deputy
Prime Minister for European Integration,
Oleh Rybachuk, who is Mr.
Yushchenko’s closest confidant. The
new Minister for Foreign Affairs, Boris
Tarasiuk, is also a dedicated pro-European
activist.
So far, Mr. Yushchenko, Mr. Rybachuk
and Mr. Tarasiuk have been the
main authors of the country’s European
policies. These Ukrainian democrats are
not approaching the European Union as
a smorgasbord of selected courses. They
want everything on the menu: full membership,
democracy, a market economy,
the rule of law and the free movement of
goods, services, capital and people. Mr.
Yushchenko has talked of lodging a formal
membership application in the late
summer of 2005.
The new government’s program
makes its objectives perfectly clear. First,
it plans to work out a “renewed national
strategy for the European integration of
Ukraine.” Next, it wants to “develop, together
with the European Union, a new
strategy for the ‘Ukraine-EU’ relationship,
which would envisage the prospective
membership of Ukraine in the
European Union.” The big challenge for
the European Union will be to come up
with a mutually acceptable roadmap for
the gradual integration of Ukraine into
the European Union.
At present, institutional cooperation
between the European Union and
Ukraine is rudimentary. As with other
post-Soviet countries, the European
Union offered Ukraine a Partnership
and Cooperation Agreement, which was
concluded in 1994 and came into force
in 1997. The agreement is valid for ten
years and can be prolonged. Although its
scope is comprehensive, covering political
dialogue, trade in goods and services,
economic, environmental, scientific, cultural
and legal matters, it contains little
of substance.
In the trade field, the agreement
does little more than codify the principles
of the World Trade Organization for
non-WTO members.Whereas the European
Union has concluded free trade
agreements with dozens of other countries,
the pact with Ukraine does not
currently offer any trade concessions beyond
those that the European Union accords
to its WTO partners. Ukraine has
been treated as one post-Soviet country
among many. The only recent advance in
trade policy has been the European
Union’s conclusion of a textile agreement
with Ukraine eliminating import
quotas.
In March 2003, the European Commission
sent a paper to the European
Council and the European Parliament
entitled Wider Europe – Neighborhood. A
New Framework for Relations with our
Eastern and Southern Neighbors. While
this was meant to provide more benefits
for EU neighbors, it disappointed pro-
European Ukrainians, because the implication
was that Ukraine would remain a
neighbor rather than become a candidate
for future EU membership.
The question of possible membership,
however, was not fully answered by
the neighborhood concept. Although
Ukraine and Moldova are European and
have persistently indicated their wish for
EU membership, they were treated as
members of a much wider pack. They
were lumped together not only with
Russia and Belarus, which have not
asked for membership, but also with a
number of North African and Middle
Eastern countries, which are not European.
Russia and Belarus have rejected
the entire neighborhood concept altogether,
while the three Caucasian countries,
Georgia, Armenia and Azerbaijan,
have accepted it.
The European Union’s intention was
to negotiate individual action plans for
each neighbor, which could vary substantially.
The previous Ukrainian
regime seized this opportunity, and
agreed an action plan with the European
Union that was to be accomplished over
three years. After consultations with
Brussels, Mr. Yushchenko has stated that
the plan will now be implemented in one
year. The vast majority of the roughly
300 actions envisaged are to be carried
out by Ukraine alone, and they are actions
that Ukraine needs to undertake
anyway.
In parallel, Ukraine must become a
member of the WTO, because otherwise
there would be little basis for further
trade liberalization with the European
Union. Ukraine has already completed
the bilateral negotiations with the European
Union required to prepare for
WTO accession, and the main remaining
obstacle is a similar bilateral agreement
with the United States. The two major
stumbling blocks are the protection of
intellectual property rights in Ukraine
and some agricultural issues.
“Ukraine could conclude
entry negotiations
with the WTO by
the end of 2005”
Ukraine must adopt a new law on
intellectual property rights, a draft of
which is waiting in the parliament, and
agricultural questions are always the last
to be settled. If these tasks can be completed,
Ukraine could conclude its WTO
entry negotiations before the end of
2005, with November as the target date.
Meanwhile, the European Union
could officially recognize Ukraine as a
market economy, implying milder treatment
in anti-dumping cases, which are
very important for Ukraine’s access to
the EU market. This is a prominent
Ukrainian demand, and the Commission
appears prepared to comply with it,
given that Ukraine is in fact a market
economy. Ukraine is also seeking progressive
increases in its steel exports to
the European Union.
So far, however, Ukraine suffers
from very limited access to the EU market.
In 2002, only 19 percent of Ukraine’s
exports went to the 15 member states
that comprised the European Union before
its enlargement in May 2004. According
to the so-called gravity model,
which assesses the extent to which countries
should trade with one another,
given the size of their economies and the
distance between them, this share
should have been about 60 percent of
Ukraine’s exports.
“The obvious solution to
Ukraine’s trade problems
with the EU is a bilateral
free trade agreement”
Until two years ago, the share of
Ukrainian exports destined for Russia
and other post-Soviet countries steadily
contracted, reaching a low point of only
17 percent in 2002. Instead, Ukraine is
increasingly exporting to all kinds of distant
new markets in Asia, notably China,
and the Middle East. Although it is important
that the country’s exports
should grow, this kind of diversion of
trade is not normal. There can be little
doubt that it amounts to trade distortion,
and Ukraine would benefit from
increasing its exports to big markets in
its own region.
The main reason for Ukraine’s limited
exports to the European Union is
that its exports are mainly composed of
sensitive items, especially agricultural
products, textiles, steel and chemicals, on
which EU protectionist measures are
concentrated. Such sensitive products
accounted for 65 percent of Ukraine’s
total exports in 2002, according to the
World Bank, with steel comprising about
40 percent, agriculture 13 percent and
chemicals eight percent.
Anti-dumping measures, usually a
thinly veiled form of protectionism, are
particularly common against steel and
chemicals, which together represent
nearly half Ukraine’s total exports. According
to the WTO, Ukraine occupied
tenth place in the league table of countries
that were victims of antidumping
measures between January 1995 and
June 2002.
The obvious solution to Ukraine’s
trade problems with the European
Union is a standard bilateral free trade
agreement, which is mentioned as a possibility
in the EU neighborhood policy.
The European Union in fact committed
itself to start negotiations on a free trade
agreement in its partnership and cooperation
agreement with Ukraine.
Almost all the Mediterranean countries
have free trade agreements with the
European Union, and the only other EU
neighbors without free trade agreements
are Moldova, Belarus and Russia. As
soon as Ukraine has become a member
of the WTO, the European Union should
offer Ukraine a free trade agreement,
which would constitute a major breakthrough
for the country’s economic integration
into Europe.
Although the foremost European
value for Ukrainians is democracy, they
cannot enter the EU club without enduring
the lengthy and laborious process of
aligning their laws with those of the European
Union, just like all other candidates
for membership. This process
could in fact be very beneficial to
Ukraine. The adoption of EU rules and
practices would help to modernize the
functioning of the state and put Ukrainian
companies on a more competitive footing.
The EU Should Welcome Ukraine as a Future Member
Ukraine, however, should not opt for
early convergence with EU rules, because
the European Union is heavily over-regulated.
Premature adoption of many EU
regulations and policies - such as the
common agricultural and fisheries policies,
tax and social provisions and environmental
rules - could harm Ukraine’s
economic dynamism. It is to be hoped
that the European Union will reform
most of these policies before Ukraine becomes
a member.
There are a number of other steps
the European Union could take to facilitate
Ukraine’s integration into Europe.
In the field of education, Ukraine has already
agreed to join the so-called
Bologna process, which provides for the
integration of higher education and the
mutual recognition of other European
countries’ degrees, in 2006. The European
Union should also allow Ukraine to
participate in educational exchange programs,
notably the Erasmus exchange
program for undergraduates. Another
important area is visa policy, where
much could be done to make it easier for
Ukrainians to acquire European visas.
For a long time, Ukrainians have declared
their “European choice” in a loud
voice without obtaining many practical
advantages. The Orange Revolution has
totally changed the situation by providing
Ukraine with both a democratic
breakthrough and a clear European orientation.
The time has come for the European
Union to welcome Ukraine and
to accept the practical implications of
the country’s “European choice.” For the
sake of Ukraine’s future political stability,
it is not the moment to disappoint
these hopes.
The two parties should compose a
roadmap, obliging the European Union
to reward each Ukrainian action with a
concession desired by Ukraine. Ukraine’s
existing action plan is a good starting
point. The European Union is unlikely to
grant Ukraine membership in the near
future. But the door should be kept open
while an ever more fertile relationship is
developed.
Anders Åslund is Director of the Russian and Eurasian Program at the Carnegie Endowment for
International Peace in Washington. He co-chaired a Blue Ribbon Commission organized by the
United Nations to draw up a reform program for the Ukrainian President.
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