This month, Ukraine celebrates Europe Day for the third year in a row. Festivities, organized by the European Commission and the government of Ukraine, will be held not only in Kyiv, but in Donetsk and Odessa too. Exactly a year ago, the European Union expanded its borders to those of the former USSR. Since then, Ukraine, along with a few other former Soviet republics, has shown the world that it is no longer a satellite of Moscow. So now the new neighbors are stepping up social events for their folks to get acquainted in a new atmosphere of European unity. The Ukrainian Observer contacted Ian Boag, the head of the European Commission's Delegation to Ukraine, Moldova and Belarus, to learn more about these neighborly relations and where the remaining fences stand.
A new policy
"The word neighborhood, strangely, does not strike a positive cord here because, I suppose, as (Ukrainian President Viktor) Yushchenko rightly said, Ukraine is a neighbor of the European Union, it isn't a neighbor of Europe. I mean, it is part of Europe. That's clear," says Boag about the EU's Neighborhood Policy. Before the Neighborhood Policy, EU-Ukraine relations were governed by the Partnership and Cooperation Agreement, which came into force in 1998. With the Neighborhood Policy came an Action Plan, approved by both sides last February, which covers recommended political and economic reforms, trade, transport, energy, etc. And if that wasn't enough, newly inaugurated Yushchenko then asked for a Road Map, or recommended set of goals for the first year. When he got it, the Ukrainians came back with their own proposals in April.
"The purpose of the Action Plan is not to sit and negotiate other documents but to get down and do it," says Boag. But for the casual observer from either side of the fence, the question arises as to why Ukraine needs so many plans and instructions if no one is denying that the country is already a member of Europe.
The Neighborhood Policy came out of the EU's expansion in May 2004, as a way to engage its new neighbors. One of these, Ukraine, subsequently acquired new leaders who promised to turn the former administration's largely rhetorical promises to join Europe into reality. Just after Yushchenko's team took up their posts in Kyiv, the Action Plan was signed.
So how does the Neighborhood Policy differ from the Partnership and Cooperation Agreement of 1998? "The Neighborhood Policy offers a much more focused and progressive relationship," says Boag because "it provides for things like industrial norms and standards to be harmonized or just made compatible ... which means the sale of Ukrainian goods on the European market will become much easier, because there's no good if your rules and regulations make it impossible to sell your goods."
How about the Action Plan? "It's a very intense document," say the delegation head, and "if followed, (it) will carry Ukraine very far in its aspirations to become a European nation like other European nations." This would presumably satisfy both sides of our proverbial fence. However, cautions Boag, "it's very clear that the Neighborhood Policy Action Plan doesn't have as its objective to lead to membership, but nor does it exclude it."
So what is to be done? As the title of Vladimir Lenin's revolutionary work asked at the turn of the last century. According to Boag, some things can be done by Ukraine without any funding or further negotiations; some things require the two sides to meet; "and there are some activities where it is perhaps useful and desirable that the EU should provide some funds," like help with administrative and judicial reforms.
Old issues
There are, however, other issues that remain undecided between the two neighbors. Following the addition of 10 new member countries last year, the EU became Ukraine's largest trading partner, accounting for 35% of all its foreign trade. Ukraine accounts for only 1% of the EU's foreign trade. The biggest Ukrainian exports to Europe are textiles, energy resources, agricultural goods and metals.
Last June, the EU limited Ukrainian annual steel exports to 606,824 tonnes, which is less than Ukraine had been exporting before several of its western neighbors joined the EU. If Kyiv wanted a higher quota it would have to get rid of its tax on scrap metal exports, said Brussels. But Ukraine needed the export tax to hold on to its scrap metal, the country's primary source of raw material for its steel industry - the seventh largest in the world.
Then on 30-31 March 2005, representatives of the Government of Ukraine and the European Commission held consultations in Kiev. According to the EU, both sides reached full agreement on the text of an agreement, which if signed would set the maximum limit at 980,000 tonnes for 2005, and 1,004,500 tonnes for 2006. If Ukraine completely eliminates its steel export tariffs, the EU would raise its quota by another 43%, said Boag. "Export taxes in terms of free trade, open trade - they are a hindrance."
Another part of the fence between Ukraine and the EU that might need some mending is the place where the energy exports pass through. Last month, Russian President Vladimir Putin and German Chancellor Gerhard Schroeder signed an agreement to build a gas pipeline through the Baltic Sea to Europe, thus bypassing Ukraine, which currently transits 85% of Russian Gazprom's exports to Europe. Energy resources is Moscow's main trump card in its dealings with stroppy former republics. But the involvement of Germany would seem to undermine European commitment to Ukrainian independence.
"Where one person is selling and another person is buying, there is always competition ... Obviously, what we are looking for is secure sources of supply ... with each contract we will have to decide which is the most secure," says Boag.
On the other hand, in May 2003, the European Commission and the governments of Ukraine and Poland signed a joint declaration on support of a Eurasian Transport Oil Corridor Project. The EU pledged 2m euros for technical, legal and economic studies of a project to extend Ukraine's Odessa-Brody pipeline to the Polish city of Plock.
Then in 2004, under the Kuchma administration, Ukraine, which is Russia's main transit zone for western oil exports as well, reversed the direction of the pipeline to pump Russian oil south, thus putting implementation of the corridor project in doubt.
"What the Ukrainians do with the Odessa Brody is their business, but for us to be interested in it, it has to be thrown in the right direction," says Boag. But Yushchenko appears committed to implementing the country's Euro-integration rhetoric. The government of Yulia Tymoshenko is doing everything to use the Odessa Brody to pump Caspian oil to Europe. So now one wonders whether the EU will be equally committed to diversifying Europe's energy needs or whether individual EU member states will be able to undermine the transit role of Ukraine and other former Soviet republics.
Lastly, the part of Ukraine's fence with Europe that has received the most negative attention of all is actually a small gate between Ukraine and Moldova. The unrecognized republic of Transdniestria, which broke away from Moldova after the collapse of the Soviet Union, is even more often referred to as a black hole for contraband goods, including illegally sold weapons.
Following the Moldovan civil war in the early 1990s, five sides have engaged in negotiations to resolve the simmering conflict: Moldova, Transdniestria, Ukraine, Russia and the OSCE. In the summer of 2002, the OSCE, Ukraine and Russia backed a project to federalize the country, but it never went any further. Then during a GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan, Moldova) meeting in Chisinau last month, Yushchenko stood alone in proposing a new seven-step initiative including free elections and peacekeeping under the aegis of the OSCE to promote a peaceful resolution.
The EU is concerned about when Moldova, destabilized by the split, becomes its neighbor after Romania joins the EU in 2007. "This is obviously important for the European Union," says Boag, who acknowledges however that "there is no European plan" for a settlement of the issue. Both the U.S. and the EU have wanted to get involved, but were blocked by Russia, which still maintains troops in the region. Now, with Ukraine playing toward the West, the EU might get more of a say in the matter. Taking into account that many Moldovans have since managed to get dual citizenship in either Romania or Russia, Brussels will have to come up with a plan or the black hole will lead directly into the heart of the European neighborhood.
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