EU Insists Kiev Choose Definitively Between Brussels and Moscow
But Yanukovich Has Other Ideas – and Options

July 18, 2013
Anthony T. Salvia
Director, American Institute in Ukraine

European politicos (Barroso, Westerwelle, Sikorski, among others) continue to beat the drum for Mrs. Timoshenko’s release, or there will be no signing of the EU-Ukraine Association Agreement and related free trade pact in November at the Eastern Partnership summit in Vilnius.

At the same time, they present it as a mutually advantageous deal (it’s not; the lion’s share of economic benefits go to Europe) that reinforces “European” values (they are in broad retreat across the continent) by imposing on Ukraine what the Economist describes as “profound reforms” that “risk breaking the very system that put Mr. Yanukovich in power.” Nevertheless, he and his prime minister continue to push for signing it.

A recent statement by Lithuanian Foreign Minister Linas Linkevičius hinted at Europe’s hidden agenda when he said last July 3rd in Vilnius that the Association Agreement does not constitute “technical negotiations with just another partner,” but entails a “geopolitical process.” In other words, Ukraine is no mere Malta or Croatia, but a country of geo-strategic importance for the West because it is perfectly suited to serve as a club with which to beat Russia – Europe’s constant aim in its current manifestation as US satellite.

Am I overstating the case?

Consider an article in the Economist of last July 6th (the same one as referred to above) on what it calls the “tug-of-war” between Moscow and Brussels for Ukraine. But tug-of-war is a children’s game. Farther on in the piece, the author calls it a “titanic contest.” That’s more like it. The magazine cites East European politicians who believe a “flawed” Mrs. Timoshenko should not be allowed to stand in the way of roping Ukraine into an anti-Russian orientation.

Such an orientation would be disastrous for Ukraine, as President Yanukovich -- ever keen avoid choosing definitively between Brussels/Washington and Moscow -- well understands. Hence the importance of Ukraine’s recently having signed the Minsk Agreement giving it observer status in the Moscow-backed Customs Union, a move Lithuania’s ambassador to Ukraine, Petras Vaitiekunas, called “disconcerting,” complaining that it “came as a surprise to us.” Observer status does not mean membership, and entails no surrender of Ukrainian sovereignty to the CU, but rankles the Europeans anyway because it indicates Kiev does not understand that in signing the Association Agreement it is agreeing to play its assigned role of club with which to beat Moscow.

Europe’s nervousness over the Minsk Agreement stems from its realization that signature of the Association Agreement and membership of the Customs Union are not mutually exclusive -- its constant protestations to the contrary notwithstanding.

As ex-Ukrainian Minister of Economics Viktor Suslov pointed out on the margins of the recent Azarov-Medvedev talks in Sochi, Article 39 of the Association Agreement explicitly permits Ukraine’s membership of other multilateral free trade areas and customs unions as long as membership of such arrangements does not contradict the norms of the Association Agreement. In his view, such contradictions would occur only in the sphere of some technical regulations.

The Association Agreement contains next to no tangible benefits for Ukraine, locks Ukraine into a position of servility vis-à-vis Europe, and imposes reforms that, again, in the words of the Economist, “risk breaking the very system that put Mr. Yanukovich in power.” Thus, there is little for Ukraine to lose if Europe says no to a November signing ceremony in Vilnius – and little to gain if it says yes.

Yanukovich, therefore should not jump through hoops to comply with Brussels’ demands. (Not that he has done so to date.) If Brussels accepts a largely unreformed Ukraine with its ties to Moscow open and in good working order, so be it.

If not, Mr. Yanukovich should not repine. He has other fish to fry. There remains the option of the Customs Union, which for all of its difficult political connotations, is replete with tangible economic benefits for Ukrainian workers and enterprises, as well as state finances in the form of reduced gas prices and nugatory gas import fees.

A survey conducted last March by the Gorshenin Institute and published in June revealed that 41.6% of Ukrainians thought Kiev should choose European integration, whereas 49.7% said Ukraine should either choose the Customs Union (34.7%), or neither the EU nor the Customs Union (15%). This is a weak result for Europe in view of incessant media and elite support for the Association Agreement in Ukraine.

A more recent survey of the Kiev International Institute of Sociology [Киевский международный институт социологии] (June 22, 2013) indicated slightly greater support for joining the Customs Union (39.8% ) than for “European integration” (36.2%).

Regardless of their preference for one arrangement over another, 69% of Ukrainians – according to KIIS -- want open borders, no tariffs and close integration and cooperation with Russia (while retaining independence) – attitudes which directly contradict the goals and likely effect of the Association Agreement. This would seem to be a natural constituency for Mr. Yanukovich. He ignores them at his peril.

Russia and Europe may be engaged in a “titanic contest” over Ukraine, but Yanukovich and his Foreign Minister Leonid Kozhara do not accept the contention of the Brussels technocracy that Ukraine must choose. They believe in a pan-European entente in which Ukraine finds its place as a bridge between the two main parts of Europe – East and West – as the logical outcome of the Cold War. They instinctively look askance at a deal that requires Ukraine to acquiesce in the continued division of the continent, while conferring on Ukraine scant compensation for enabling someone else’s agenda (in this case, Brussels’.)

Fortunately for Yanukovich, Article 39 permitting Kiev to join both a free trade area with Brussels and the Customs Union with Belarus, Kazakhstan and Russia gives him all the freedom for manoeuver he needs.