Archive for August 9th, 2012

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Immediate benefits? Ukraine and CIS FTA ratification

August 9, 2012

Regular readers of this blog will recall a post I wrote not so long ago relating to the Russian led Customs Union and the Vietnamese accession talks due to begin as early as September this year.

Well, a week or so ago, Ukraine did indeed ratify a free trade agreement with the Customs Union.

As I wrote in the post I link to above, “If the EU is relying upon Ukrainian public opinion to force the government to release these opposition leaders at the risk of losing the DCFTA and AA with the EU, then they could well be deluding themselves. According to an IRI poll released a few days ago, only 37% of Ukrainians favour a trade agreement with the EU (down from 42% in November 2011), whilst 41% favour joining the Russian led Customs Union (up from 40% in November 2011).”

“Further to this, since the surveys for that poll, Russia has joined the WTO providing a far more level playing field for Ukraine in the event of dispute as both nations are now subject to WTO rules and rulings.”

And so it has come to pass, very swiftly after ratifying the Customs Union FTA, and taking into consideration recent Russian accession to the WTO, some benefits to Ukraine have already arrived if you happen to be in the metal business.

The recent Ukrainian ratification and the serious interest of the Vietnamese will no doubt hearten Mr Putin in the pursuit of his Eurasian Union counterweight to the EU trade block.  It also makes Ukraine vital to the Eurasian Union just as much as it is vital to the EU’s EaP.  Both would suffer greatly from the absence of Ukraine.  In fact both the EaP and Eurasian Union would become something of a joke without Ukraine.

Those who wrote off the Eurasian Union when it was initially announced may well need to reconsider their stance.

My position over the issue is clear throughout the historical posts on this blog, however those clever chaps back in the boiler room at Chatham House, (and I say that because they are clever and not because I am a member of the organisation and want to push its virtues to you), have come up with a report that collates all my thoughts throughout this blog on the subject.

Needless to say, the Eurasian Union is not necessarily the joke many thought it was.

And so, with majority of Ukrainian public opinion currently seeing Russia and the east as its preferred trading partner, a very long way to go before the EU’s DCFTA is signed and ratified due to its being held hostage by the politically driven EU AA at EU insistence, then the EU is likely to be playing catch up rather than leading the way with regards to influencing Ukraine via trade very shortly.

It will be interesting to see just how quickly Ukraine sees some serious benefits from the ratification of the Customs Union agreement.  The faster those benefits are seen, the less likely Ukraine is going to be to crumble to EU AA pressure over the likes of Tymoshenko and the benefits that may come with the DCFTA, that is currently likely to gather dust for a long time.

My guess is that it will gather dust until sometime between 2016 and 2021, although I have made that prediction in this blog last year and nothing has happened to make me change my mind.  I am not going to change tack now.

In case you are wondering, following on from yesterday’s post, the Central Election Committee of Ukraine voted 10/14 in favour of abiding by the current Ukrainian laws and therefore have refused to register Yulia Tymoshenko and Yuri Lutsenko as candidates for the forthcoming October elections.  As far as I know, they have not reached a decision on Lazaenko yet, but I suspect he will be rightly disqualified from running.

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