Ukraine and the EU parliaments simultaneously ratified the economic and political parts of the Association Agreement that will strengthen ties between Kiev and Brussels. Economic integration is postponed until the end of 2015.
The document was approved at 1:00pm in Kiev and there was a
synchronous signing session in the European Parliament in
Strasbourg.
Ukraine’s Rada voted 355 votes in favor out of 381 total, and the
European Parliament supported the ratification with 535 ‘yes’
votes and 127 against, with 26 abstaining.
What is the Association Agreement between Ukraine and
the EU?
– Establishes a gradual deepening of economic and political
ties between Ukraine and the EU
– A free trade zone will be established on December 31, 2015 to
integrate Ukraine into Europe’s $17 trillion economy with 500+
million consumers
– This means Ukraine will lose preferential treatment and
access to Russia’s $2.5 trillion and 146 million consumer
market
– Ukraine will have to meet EU requirements on food safety and
product quality
– Cooperate on several other issues: energy, industry, taxes,
tourism, justice system, law, etc.
– It will make it easier for Ukraine to seek financial
assistance from the EU
“From tomorrow I task the government with approving the
implementation of the agreement and immediately implementing it
into the force of law,” President Petro Poroshenko said at
the ratification in Kiev. Poroshenko said he hopes the agreement
will help Ukraine reform its economy and fight corruption, and
that someday Ukraine hopes to apply for EU membership.
Ukraine “has embarked on the European path and nobody will
are to shut the door to the EU membership for Ukraine,” the
President said, as quoted by ITAR-ITASS.
Free trade with Europe’s $13 trillion economy will be postponed
until January 2016, due to the weak state of Ukraine’s economy
which would make it vulnerable to a sudden influx of European
goods. Ukraine will continue duty-free trade with Russia and
other CIS states until December 31, 2015, and on January 1, 2016
will begin economic integration with the EU.
Ukraine will still have the benefit of sending exports to Europe
under a preferential trade code, but duty- free trade will not
come into effect until 2016, protecting both Kiev and Moscow from
economic risk.
READ MORE: 5 facts you need to know about Ukraine-EU trade deal
In 2013, Ukraine exported goods worth $16 billion to Russia,
nearly 25 percent of all total exports. In comparison, Ukraine
exported $17 billion to Europe in the same 12-month period.
Since the political tension has intensified between the two, both
have been cutting back on imports. In the first seven months of
2014, Russia reduced Ukrainian imports by 23.7 percent down to
$6.7 billion, according to Russia’s Statistics Bureau. At the
same time, Ukraine has been decreasing goods bought from Russia,
which have fallen 20.7 percent to $9 billion. The lack of
cooperative trade between the two has left a negative balance of
trade of $2.3 billion.
Russian President Vladimir Putin has estimated that nixing duty-free trade with
Russia and switching over to the European system will cost
Ukraine €165 billion over the next 10 years.
During trilateral talks in Brussels on Friday, Ukraine, Russia,
and the EU agreed Ukraine’s integration into Europe’s
trade orbit will begin on January 1, 2016.
Ukrainian President Petro Poroshenko signed the economic (the Deep and Comprehensive Free
Trade Area, or DCFTA) part of the Association Agreement with the
EU along with ex-Soviet nations Georgia and Moldova on June 27.
Ukraine signed the political part of the agreement on March 21,
shortly after Crimea rejoined Russia.
The Association Agreement and Deep and Comprehensive Free Trade
Area (DCFTA) will replace the current Partnership and Cooperation
Agreement Ukraine signed with the EU in 1998.
Article source: http://rt.com/business/188128-ukraine-eu-association-agreement-parliament/
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