Ukraine has been negotiating for over 15 years with the European Union (EU) over improving mutual cooperation and possibly becoming a member state. Unfortunately, the official government of Ukraine has been highly divided on the topic of EU accession. In the last five years, however, this has not stopped the negotiations and application for the Association Agreement. Recent protests in Ukraine in December 2013 clearly exemplify citizen’s disappointment. It is important to find out what exactly the Association Agreement entails since Ukrainian government, for now, has chosen not to sign it. This article questions the effects of the Association Agreement for the EU and Ukraine, and then analyzes the implications it could have on Belarus.
The EU – Ukraine Association Agreement
The EU – Ukraine Association Agreement (AA) was established at the Paris Summit in 2008. On March 2012 the primary negotiators initialed the text of the AA, which included provisions on the establishment of a Deep and Comprehensive Free Trade Area (DCFTA)1 as an integral part. The primary existence for the AA is “the development of EU-Ukraine contractual relations, aiming at political association and economic integration and leaving open the way for further progressive developments”2. Essentially, this agreement would allow for a shared relationship based on a commitment to common principles. These common principles can be interpreted differently, as will be noticed later in the paper.
According to the Guide of the AA, the AA contains over 1200 pages of detailed text. It is comprised of a preamble which sets out the Agreement’s purpose and underlying philosophy, seven titles concerned with different areas of cooperation, 43 annexes setting out legislation and three protocols3. There is an essential reason why it is so lengthy. The agreement is binding, including rules-based provisions and cooperation agreements that are developed further than traditional agreements4. This could be mainly due to the EU’s previous experience in negotiating, signing and implementing agreements with states. As predicted special attention is given to implementation and subsequent enforcement issues, including clear timelines and establishment of an appropriate infrastructure, to create the necessary predictability of economic operators5. This may have been a problem with other states in the past. However, all of this should not come as a surprise to Ukraine, as it has been long agreed upon through the negotiation rounds.
The agreement itself includes a number of elements. First, common values, democracy and rule of law6 are identified as foremost important elements in which the agreement is enshrined. This is where political dialogue and reforms are discussed focusing on the EU’s functioning as an example. Secondly, enhanced cooperation in foreign and security policy with focus on regional issues, as well as conflict prevention, weapons of mass destruction (WMD), non-proliferation and disarmament7. The EU’s primary goal is to converge in the field of foreign and security policy and thus, promote international stability and security based on multilateralism. Thirdly, DCFTA will include binding provisions on gradual approximation with EU norms and standards in trade and trade-related areas8, among the basic duties. Fourthly, justice, freedom and security, based on the Visa Liberalization Action Plan, covers the rule of law, migration, the fight against organized crime, and counter – terrorism9. This element is most important to Ukraine; however, the EU states conditions such as well-managed and secure mobility that should first be of importance10. Fifthly, energy, including nuclear issues with particular focus on the security of supply, the gradual integration of energy markets, energy efficiency, renewable energy sources and nuclear safety11 seems as a highly important element. Essentially, this is included in the DCFTA.
Lastly, enhanced cooperation is defined in 28 key sector policy areas that are based on gradual approximation with the EU acquis12. This is of high relevance, as the EU has not specifically stated whether Ukraine is offered a membership in the EU, but rather is bringing it closer to see whether the transition is possible. This approximation is also beneficial due to its relevance and similarity with international norms and standards. The AA could have been analyzed in further detail, if the draft text was accessible.
Obstacles to the Implementation of the AA
Obstacles to the implementation of the AA, including DCFTA13 are clearly visible. There are two types of obstacles – first, obstacles coming from the EU that inevitably slow down the process of implementation of the AA. Secondly, there are obstacles within Ukraine. The most obvious obstacle from the EU is the acceleration and force of the implementation of the norms and values on Ukraine. That is not to say that Ukraine does not want to implement similar norms and regulations to the EU, rather that some norms inherently will not coincide with the general population. The changes that are possible to a degree that pleases the EU have been made, for example a National Preventative Mechanism against torture14 has been established. However, since selective justice was still in place15, perhaps it was necessary to keep it as is based on its use in rare circumstances only. Unless the Ukrainian government could not change the law (which was not the case), it clearly identifies the reason why it was kept. In fact, the Ukrainian government openly says that they disagree with the EU on the matter of the rights of the opposition16, where selective justice is mostly used, demonstrating the difference in normative belief. This, on the other hand, is an obstacle to the implementation of the AA from a Ukrainian perspective.
A most prominent example of this is Yulia Timoshenko’s imprisonment. The EU sees that as an obstacle where selective justice is being used against a politician. This case, must take into consideration both points of view. As mentioned above, the Ukrainian government does not share that view with the EU and neither does Belarus. It is believed that Yanukovich has committed serious crimes. The fact that the Ukrainian government chose to keep Timoshenko and Lutsenko as a bargaining technique for the economic integration with the EU, exemplifies how strongly important and relative these two people are to the politics of the country. Similarly, Belarus tends to use exact same tactic as Ukraine, only in different negotiations with the EU. However, it is important to remember that the EU does not have a very strong reputation for its ability to democratize states outside of the enlarged states. The EU attempt to influence Ukraine using the Timoshenko case is not viewed positively in Ukraine. It is possible that Ukrainian and Belarusian government, knowing the EU’s reputation, is using this selective justice because they know that for now they are able to.
A second major obstacle from the EU is the skepticism of individual member states. The older member states seem to be against an agreement, while younger states, such as Poland, Lithuania, Czech Republic and Slovakia have declared their readiness to sign an agreement without pre-conditions17. This shows which countries seem to understand what Ukraine is going through, while others are worried and prefer an improvement in the state of Ukrainian democracy. It has been stated that the positions of France, Germany and the UK remain uncertain18 providing the European Council with a difficult decision to avoid explicit statements about the prospects of signing the AA.
In December 2012 the European Council confirmed the upcoming signing of the AA, by November 2013, on three conditions that Ukraine must meet19. The improvement of the electoral system to increase transparency of the voting process, reform of the judiciary and introduction of reforms needed to implement a DCFTA must be all in place20. If these actions are not taken by Ukrainian government there is a risk of the whole process being delayed by the EU. Interestingly, the process on the other hand got delayed due to postponement by the Ukrainian government. In addition, the European Parliament will be holding elections in 2014, meaning that the decision-making process will be further slowed down and there will be relative changes in the European Commission21.
From the Ukrainian side, the lack of their progress in improving the anti-corruption system has also stalled planned disbursements under EU sectoral budget support22. This is seen as an obstacle because only at a later stage initial measures were taken to start removing EU’s concerns. While details are not specified in the report, one is lead to believe that anything having to do with influential opposition in Ukraine has been postponed. The Ukrainian government has worked hard on building and strengthening the sectoral ties with the EU, then left the toughest decisions to the end. Now, the Ukrainian government has a bargaining technique with the EU that the cooperation achieved to date can be dismantled only by significant disagreements with the officials.
Two constant obstacles outlined by the EU officials during the negotiations are first – conflict of interest and corruption in the judiciary, and second – the stabilization and consolidations of its public institutions23. The functioning of public institutions has been long embedded in Ukraine since the Soviet period and like Russia, has taken long to reform. Assuming that an easy partnership building exercise with the Ukrainian public institutions can be achieved is a mistake. Especially, since the AA was not signed in 2013, some led to believe that Russia still has an important influence over Ukraine. One of the large obstacles playing an important factor here is the division of the Ukrainian elite and politicians. Half of the population is pro-Western aiming to escape from Russia (ones that are currently protesting in Kiev), while half identify themselves as Russians as much as Ukrainians24. This results in difficult decisions for politicians to make, and multilateral policy focus on continuing ties with Russia and the EU. Stabilization and consolidation of public institutions is a difficult task for the government, where conflict of interest and corruption in the judiciary is inevitable.
Some literature suggests that the economic downturn of 2008-2009 has had a negative impact on the Ukraine’s domestic and foreign policy. This can be viewed as an obstacle towards the achievement of the agreement, due to Ukraine’s subsequent choice of strengthening economic and political ties with Russia in the proceeding period25. Since at the time Ukraine had yet to establish a strong relationship with and firm economic support from the EU, the decision was inevitable.
Lastly, literature suggests that one of the obstacles of Ukraine’s slow emerging relations with the EU is that Ukraine never existed as an individual state prior to 199126. This obstacle can be viewed as an alternative solution to building and strengthening the Ukrainian state. The EU has presented a firm functioning model that can advise on a number of areas that a young state may not know. It seems that Ukraine is taking the opportunity to implement the model. So the lack of existence of Ukraine as an individual state prior 1991 does not seem to be an obstacle and perhaps is an opportunity.
Another obstacle for Ukraine is attempting to balance relations with the EU, CIS and other countries. Some of the literature suggests that if Ukraine chooses to ratify the AA, they will be forced to change or cancel all of their agreements with other countries27. This is where Russia is playing an important role, as it would like Ukraine to sign the Customs Union with Belarus and Kazakhstan. The experts note that this should not be a large obstacle, since existing agreements will still stand while the EU goods, under a new agreement will have better prices. If Ukrainians select the EU goods with better prices the other trading partners will have to comply with the Ukrainian rules if they wish to continue to sell into the Ukrainian market28. However, this is not an important obstacle, as in a globalized world states compete in the fluctuating markets exemplifying competition.
Effects on Ukraine
The implications for the ratification of the Association Agreement seem to present a number of outcomes. First, the performed structural changes are not going to lead to dramatic changes in Ukraine. The AA resembles a lot of what PCA was – Ukraine had to sign and ratify the agreement, but implement only what was beneficial to them. It has been noted by analysts that since the EU products are already widely accepted in the Ukrainian market, the impact of tariff liberalization for EU products will be very limited29 allowing for only small possible increase in the competition for EU and Ukraine’s goods. Many Ukrainian people may not even notice a difference.
Second, the statistical prediction in the guide to the FTA estimates that in the long – run the DCFTA will result in an increase in welfare in Ukraine of 5% across population, while average wages in Ukraine will rise by 4-5%30. Large businesses and corporations would be able to profit and raise wages, as they would have the infrastructure to grow their businesses with new economic opportunities. Due to a liberalization of the market, Ukrainian businesses should be able to establish themselves in the EU. However, it may take a while for the opportunities to be discovered after the agreement is implemented.
Thirdly, DCFTA will provide Ukraine with access to the EU’s market31 benefiting the EU businesses and citizens. It is difficult to analyze exactly what would be beneficial to Ukraine, because it is unknown which sectors of a single market the EU will open to Ukraine. In addition, the Ukraine will have access to the EU funding “to assist in integration through the European Neighbourhood Policy Instrument”32. The EU promises to assist Ukraine in number of technical areas, thus, taking Russia’s spot or giving the choice to Ukraine to choose from two giant powers.
Fourth, by focusing on integrating justice and home affairs, Ukraine may have an easier time entering into visa-free travel with the EU33. This is a very sensitive topic area. Ukraine has focused on cooperating in justice and home affairs, because they wish to have a visa-free travel. EU citizens currently can come to Ukraine. However, the EU sees openness in Ukrainian borders as a possible threat to the EU. In addition, the possibility of a high inflow of cheap labor from Ukraine could destabilize their markets. The European Commission is quiet on this issue, but if Ukraine achieves all the necessary requirements, the EU might have no choice but to begin negotiations regarding visa-free travel.
A fifth benefit to Ukraine, as noted by literature, would focus on the EU serving as a template for future Ukrainian sectoral reforms34 and possibly as an example for Belarus. Obviously the EU is already ‘exporting governance’ by advising Ukraine on implementation of the necessary reforms according to the EU model. Once an agreement is reached, Ukraine as a non member of the EU may choose to act similar to Russia – cooperating and participating, but choosing its own tactics in sensitive areas (such as political prisoners). On the other hand Ukraine may actually choose to follow the EU model and avoid the difficulties it experienced during Soviet times. This scenario is least likely, because not signing the AA at the end of 2013, exemplified Ukrainian’s government sudden surprising choices. Belarus, will be able to witness the changes, analyze the outcomes and choose what would be most appropriate for itself in the future.
It is important to note the most recent advancements in the negotiations for the AA will influence the outcome of the ratification of the agreement. Yanukovich appealed to the Commission on Human Rights to pardon Lutsenko35. Two days later he was free. First, it is possible that the action was taken to please the EU36 due to numerous pressures and agreements (AA) that are imbedded in Ukraine making these changes. A second factor is to create distraction from Timoshenko, since the Ukrainian government is less likely to release her37. She has an incentive to run for president once she is out, while Lutsenko is not interested in a presidential position38. A third factor named ‘Cyprian’ focuses on the offshore accounts that Yanukovich and other officials hold in Germany39. Germany had threatened that it will tax the sums held in their banks unless actions are taken with the political prisoners in Ukraine40. How legitimate these claims are is unknown, but they should not be disregarded. A less clear fourth factor explains that the release of Lutsenko is viewed as the end of ‘this’ regime and the beginning of a new revolution41. Even though Lutsenko does not have the right to conduct political activity, in the near future he will be able to stand with the opposition42. This factor is similar to the first one, portraying the necessary reform and changes EU is requesting, however with less positive incentive for Yanukovich. The first two factors are most likely to have triggered Yanukovich’s action. He may have wanted to act for a while but needed a good reward and appreciation for his actions from the Ukrainian public and the EU. In addition, this action illustrated a perfect political atmosphere between EU and Ukraine, resolving their differences on selective justice (with a selected case of Lutsenko).
Implications on Belarus
The EU – Ukraine relationship largely affects Belarus for many reasons. The signing of the AA may not result in significant political changes in Belarus, but it will affect the Belarusian economy and Belarus – EU political relations. There already have been three Belarusian neighboring countries that have joined the EU, leaving Ukraine and Russia to stand-alone. It is well known that Russia will not join the EU. If Ukraine signs the AA, it will mean that Ukraine’s relations will be much stronger with the EU than with Russia. Belarus has long depended on Russia, but it had a choice of relations with Ukraine as well. Leaving Russia as the only post-Soviet partner will increase Belarusian dependency on Russia, giving leverage to it.
Secondly, the EU has already attempted to exert influence on Belarus through Ukraine. Ones the AA is signed, it will be much easier for the EU to indirectly affect Belarus through Ukraine, since Ukraine will be pressured to take the EU’s side. It is important to note that it will not be easy to manipulate Belarus politically, however economic sanctions, trade and agreements will become more difficult to conclude with Ukraine due to DCFTA. This will lead to a stronger divide between the Customs Union and the EU-oriented countries.
Thirdly, Belarus will become an even more important bridge between the EU and Russia. Since it will be the only country left with no intensions on becoming a member state, it will increase its importance in both the EU and Russia’s opinion. Russia will want to keep Belarus at close relations, because it will understand how easy for the EU it will be to affect Belarus through different sectoral channels.
Lastly, the overall political relations between Ukraine and Belarus will exponentially decrease. Belarus will be forced to express its clear stand on the EU and Russia. Of course Belarus will continue to strengthen its relations with Russia, due to its isolation by the EU’s countries and EU-oriented countries. At the same time, it will continue to improve its sectoral ties with the EU, using the same technique as Ukraine did. Belarus will leave out the most important decisions such as human rights violations to the last minute and out of the discussions.
In conclusion, this article has analyzed the implications of the implementation of the Association Agreement on Ukraine and Belarus. According to the previous EU-Ukraine relationship it is clear that Ukraine wanted and worked towards becoming a closer partner with the EU. The division within the Ukrainian public posed some backward activity in relations but has not stopped the negotiations. While the draft of the Association Agreement itself is unavailable to the public, it is clear it is focused on convergence of all technical spheres or according to the EU norms and values. Due to a number of important obstacles it is possible that the AA may not be ratified. Obstacles are visible not only from Ukraine, but from the EU as well. While Ukraine wants to be integrated with the EU, the Ukrainian government does not want to reform areas that may pose a threat to integration with the EU, and it is clearly visible in the recent protests. At the same time, Belarus will have large implications if Ukraine does sign the AA, as it will be the only country left in Eastern Europe with no intensions becoming a member state.
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13Note: In this case it means implementation – the final stage portraying the commitment to the agreement, not ratification.
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