Completion of Ukraine/EU negotiations on DCFTA

On 20 October, the Deputy Prime Minister of Ukraine Andriy Kluyev and the EU Commissioner for Trade Karel De Gucht announced that the parties have concluded negotiations on a Deep and Comprehensive Free Trade Area (DCFTA). The Commissioner said that this means the technical completion of negotiations on the Association Agreement, which includes the DCFTA, could be achieved by the end of the year. He expressed the hope that it would be possible to initial the DCFTA at the Ukraine/EU summit scheduled for mid-December, but noted that signing the agreements would depend on the political will of the Ukrainian government. The conclusion of the DCFTA negotiations was in question until the last minute because of former Prime Minister Yulia Tymoshenko’s sentencing to seven years’ imprisonment. According to unconfirmed information, the Ukrainian president Viktor Yanukovych may visit Brussels in November.
  • The completion of the DCFTA negotiations is a success for the EU and UkraineIt means that the crisis in bilateral relations which has been growing in recent weeks has now been partially resolved. The events of recent days – including the cancellation of the vote in the Ukrainian parliament on amendments repealing the article under which Yulia Tymoshenko was sentenced, the EU’s cancellation of Yanukovych’s visit to Brussels, and his statements to the media, in which he called into question the need to sign an Association Agreement with the EU if there were to be no membership prospects – had indicated that Ukraine might delay completing the negotiations on the Association Agreement.
  • Despite the completion of the negotiations, it is still not a foregone conclusion that the DCFTA will be initialled at the December summit. The question of prospects for EU membership, which Ukraine is looking for, remains a contentious issue. At the same time, it is still possible that Ukraine will use this as an excuse trying to exclude the DCFTA from the Association Agreement, and sign the trade agreement separately. The rhetoric coming out from Kyiv demonstrates that in its relations with the EU, the Ukrainian government does not intend to make any concessions concerning its domestic politics (namely, the release of Tymoshenko) at the price of signing the Association Agreement.
  • As for the initialling of the Association Agreement, its final signing and ratification will depend on the development of Yulia Tymoshenko's case, which will be considered by the appellate court in Kyiv. It is likely that if the former prime minister is kept in prison, the EU will postpone signing and ratifying the agreement for an undetermined period.
  • Ukraine has decided to terminate its negotiations on the DCFTA, because their failure would significantly reduce its room for manoeuvre in foreign policy, and weaken Ukraine’s negotiating position towards Russia. The consequence would be an increase of Russian pressure, especially regarding Ukraine’s accession to the customs union of Russia, Belarus and Kazakhstan.