Inside Ukraine №10

July 2010

Customs Union, WTO and EU FTACustoms Union, WTO and EU FTA

Active trade agreements

Ukraine’s role in integration

The shape of the Eurasian region will depend very much on Ukraine: whether it becomes a Chinese hegemony or a powerful Euroatlantic democratic community.

Jean Chrétien

Ukraine’s role in integration

Any new Eurasian union of states that develops around Russia without an independent Ukraine will will become less European and more Asiatic with every passing year.

Zbigniew Brzezinski

A customs union

Single customs territory No duties or restrictions internally A single customs duty on third-country

goods A common foreign trade policy

Russian-style customs union

400 exceptions that restrict the free movement of goods

Continuing customs control at borders between members

Non-tariff trade barriers such as quotas and subsidies

Russian-style customs union

Not a real customs union Not even a free trade area

Russian-style customs union

Distribution of votes on CU Commission

Distribution of customs revenues

0 50 100

Russia

Belarus

Kazakhstan

0 100

Russia

Belarus

Kazakhstan

Russia’s integration intiatives

Participant but not member

CISCIS

1991 р.(December)

1993(September)

Associated memberstatus

Economic UnionEconomic Union

1995(January)

Non-member

Customs Union

Customs Union

2000(October)

Observer status

EAEAEAEA

2003(September)

Participates with reservations

Unified Economic Space

Unified Economic Space

Ukraine’s ambiguous position

13.02.2010President says he is positive about the idea of joining a customs union with Russia

27.04.2010President tells PACE session: “Joining the Customs Union with Russia, Belarus and Kazakhstan is impossible at this time.”

Viktor Yanukovych

“Ukraine could integrate into the Customs Union at a different pace and on different terms than Kazakhstan and Belarus.”

Leonid Kozhara

Ukraine’s ambiguous position

Customs Union, WTO and EU FTA

Joining CU makes it impossible to set up an

FTA with the EU...

Moscow insists on the Customs Union

…and violates WTO rules

Unresolved issues with EU

Geographic identification of product origins

Agriculture, sanitary and phyto-sanitary norms

Duty policy

State procurements

Basics of colonial policy

Streamlining trade routes and protecting trade Interfering in local conflicts to support battle-

readiness of own armed forces Linguistic and cultural expansion Acquiring and exploiting economic assets Forcing inconvenient international agreements

Inefficiency of colonial relations

Colonies cannot freely use their own resources and develop independently.

20th century empires were spending more on their colonies than they were gaining.

The inevitable collapse of an empire leads to social upheaval for both sides.

From colonization to integration

Integration following a double standard is more of a problem for Russia than Ukraine.

Ukraine has all the leverage it needs to ensure high-quality integration with Russia.

Russia has a unique opportunity to develop a new integration platform with Ukraine based on European principles.