The EU Opens its Eyes to The East

At long last the EU Ukraine Association Agreement has been concluded after a marathon ratification process lasting 3 years. It will be implemented in full from the 1st of September 2017. The final step was a decision announced yesterday (11th July) by the Council on the eve of today’s EU Ukraine summit in Kyiv. The EU and Ukraine now formally start their work to develop a close, long-term relationship in all main policy areas.

The conclusion of the bureaucratic process is largely symbolic, as most of the Association Agreement is already operational. Many political and sectoral parts of the agreement have been provisionally applied since 1 September 2014, while its trade part, the deep and comprehensive free trade area (DCFTA), has been provisionally applied since the 1st of January 2016. But the full entry into force of the agreement is nevertheless significant as it will now give a new impetus to cooperation in areas such as foreign and security policy, justice, freedom and security (including the problems of how to handle migration and refugees), taxation, public finance management, science and technology, education and the information society. It also sends an important message that the Ukrainian people’s aspiration for greater economic integration with Europe are being formally recognised and institutionalised.

The Association Agreement between the European Union and Ukraine was signed in 2014, marking a new stage in the development of EU-Ukraine relations. It provides an overarching policy framework for bringing Ukraine and the EU closer together: it promotes deeper political ties, stronger economic links and enshrines the principles of a shared respect for common values.

The economic part of the agreement, the DCFTA, is intended to help to modernise Ukraine’s trade relations and further economic development by opening up markets and harmonising laws, standards and regulations in various sectors. This will gradually align key sectors of the Ukrainian economy with EU practices. There remain some import quotas for sensitive products, primarily selected agricultural goods, where Ukraine is particularly competitive in terms of price, in order to protect EU producers from market disruption, but as the trading relationship between Ukraine and the EU strengthens some of these have already started to be relaxed and it is to be expected that they will further continue to do so until we see full market integration.

This is an important achievement and a historical milestone in EU Ukraine relations; it sends a positive message to EU companies interested in doing business with Ukraine. The country has been gradually rebuilding its reputation, and has proved to be a resilient and reliable partner notwithstanding the experience of more than three years of military conflict with its powerful neighbour to the East. The EU is opening its eyes to the East, and Ukraine is now set to become the new hot destination for entrepreneurs looking to achieve high returns on business investment in the Eastern frontier’s developing markets.