Ukraine would like to have observer status in the Customs Union and take an active role in debating any initiatives proposed by the three-nation free trade organization that includes Russia, Belarus and Kazakhstan.
“We’re now negotiating
such a form of cooperation, under which Ukraine will be an observer
in the Customs Union,” said Prime Minister Mykola Azarov at a press
conference on March 19.
Ukraine hopes that it will
be able to send a representative to the organization to take part in
all sessions on advisory basis. At the least, Azarov said Ukraine
will be informed about all new initiatives at Customs Union and be
ready to act on them.
Ukraine’s previous
initiative to join some of the provisions of Customs Union in a 3+1
format has been turned down by Russia, which has been pressuring
Ukraine into full membership of the economic organization. In
exchange, Ukraine would get lower gas prices for Russian gas, among
other benefits.
The Customs Union, which
was created in 2007, was designed as an organization, where member
countries apply no customs duties and other economic limitations
against each other. The organization was designed to promote trade
within its borders and internationally. However, there are
indications that the union is not working as well as the member
nations hoped.
In Kazakhstan, the
opposition is pushing for a referendum on membership in Customs
Union. A report by Da Vinci AG analytical group that came out
earlier this month showed that membership in Customs Union failed to
give member economies the boost they hoped for, and caused a number
of side effects such as increase in drug trafficking within the
union.
The group also concluded
that protectionist measures within the Customs Union are slowing down
modernization of member country economies, damaging their long-term
prospects.
Ukraine has been resisting
the pressure to become a full member, which would rule out further
economic integration with the European Union. Ukraine is hoping to
sign a Deep and Comprehensive Free Trade Agreement with the EU this
November, which would give long-term advantages for Ukraine’s economy
and introduce many of European business rules in the nation.
But Azarov said that
cooperation with Customs Union remains “a condition for survival”
of Ukraine. He said Ukraine’s trade turnover with the three members
of the Customs Union stand at $65 billion, which is $15 billion more
than with the whole of EU.
He said full membership in
CU is not an issue, though, because it would limit Ukraine’s
sovereignty because the nation would have to delegate a part of
decision-making functions in trade and foreign relations to this
super-state body. He said the status of observer would “ allows us
to keep our sovereignty.”
Azarov said that Ukraine
hopes to remain informed about ongoing debates in the Customs Union
to be able to lobby individual governments to “correct decisions.”
He said Ukraine also hopes that CU member nations will not apply any
discriminatory measures against Ukraine.
“We’re not counting on
any preferences, but let’s act so that there are no discrimination
measures against Ukraine in mutual trade,” Azarov said.
Kyiv Post editor Katya
Gorchinskaya can be reached at gorchinskaya@kyivpost.com.
