EU Enlargement: Pros and Cons For Ukraine

Ukraine’s European aspirations and the consequences of EU enlargement, which Ukraine will feel as early as next year, have been of late actively discussed in the regions. Ukrainian diplomats predict that EU enlargement will adversely affect Ukraine’s social, economic, and political situation in the next two years. However, they simultaneously forecast a brighter future for Ukraine. Having weathered the crisis next spring, which experts consider inevitable, Ukraine will secure a favorable position in European geopolitics and get a fair chance of economic revival, provided the EU has nothing against it.

Today Ukraine’s European integration is taking place against the background of serious and complex processes in both Europe and Ukraine: the EU constitutional debate and the crisis in the Russo-Ukrainian relationship triggered by the Tuzla affair. Such was the statement of Euro-Atlantic Cooperation Institute Director Borys Tarasiuk at a Vinnytsia round table dedicated to Ukraine’s EU integration, being one of a series of round tables the institute is holding across Ukraine. The experts think it is impossible to organize the process of European integration from the capital alone.

Among other members of the delegation visiting Vinnytsia were Deputy Foreign Minister Oleksandr Chaly and Hans-Johann Schmidt, aide of the German Embassy in Ukraine.

After the ten countries become EU members on May 1, 2004, Ukraine will automatically have common borders with the EU. The latter, obviously, will be interested in ensuring the safety of its borders with Ukraine along with the rest of Ukraine’s borderline. According to Oleksandr Chaly, after its enlargement the European Union will be unable to address the issues of its safety and defense policy without considering Ukraine’s role. Its borders will become a zone of strategic interests, in particular the border between Vinnytsia oblast and Transnistria, where the situation is quite tense. Experts predict this will further intensify the tug of war between Russia and the EU for a greater influence over Ukraine. According to the round table participants, the recent Tuzla events are evidence that Ukraine will be forced to determine its new place in the Eurasian continent.

Aside from the geopolitical challenges, EU enlargement will affect Ukraine’s foreign trade and economic relations. Expert estimates suggest that Ukraine will lose at least 600 million euros annually, with the new customs regulations and standards in place, for which Ukraine is not prepared. Some exports might be suspended for two or three months. Our current exports to the ten prospective EU members will decline by nearly 12%. Steel industry will be hit hardest. Today its exports to these countries come to 235 million euros. Meanwhile, the EU has not given any answer yet as to whether this market will remain open to Ukrainian steel. Economy Minister Valery Horoshkovsky is preparing to visit Brussels, where Ukrainians hope to get answers to all their questions and agree on compensation for the negative effects of EU enlargement.

“We don’t ask for money,” Minister Chaly says, “but a certain system of compensatory measures, in particular higher quotas for the exports of Ukrainian goods to the EU markets, a moratorium on antidumping measures, and social privileges and support for structural funds and investment projects in Ukraine. We also need technical support for certifying and standardizing our products that could potentially meet EU standards. This is especially relevant for our agricultural producers.”

However, Ukraine’s major goal is to sign a free trade agreement with the EU. The EU leadership thinks Ukraine has very ambitious plans, since it contemplates a full membership after competing its economic and trade integration with the EU. Meanwhile, Europe obviously wants to preserve the status quo.

“Put simply, what they mean is that they are ready to let us into all spheres of their life but not grant us EU member status,” Minister Chaly said, adding, “This is the major difference between our plans and Europe’s wishes.”

Thus far the positive effects of EU enlargement act as a non-financial incentive. “A majority of Ukrainians in all regions support the European idea,” Oleksandr Chaly is convinced. “This unites us. We need the European idea to preserve our sovereignty. By integrating we confirm our territorial integrity and independence. EU enlargement will speed our integration.”

One should not expect any positive results from EU enlargement before 2006-2007. Ukraine will have a new neighbor with one of the world’s largest goods and services market. Moreover, the EU will strive to surround itself with a zone of stability and prosperity. And a prosperous and environmentally safe Ukraine reflects its interests. Thus our diplomats count on technical assistance and credit resources that the EU will offer Ukraine to help us embrace European standards. The experts also predict an active integration of our transport, energy, and communications systems with those of the EU.