Ukraine outrage over delay on EU trade deal
Kiev protests, Dec 2013 - Photo Yuriy V Dzyadyk
(KIEV) - Ukrainian President Petro Poroshenko is facing a backlash from his staunchest supporters for bowing to Russian pressure and postponing the implementation of an EU trade deal the two sides plan to ratify Tuesday.
Some warned the decision to delay the ex-Soviet state's economic tilt westward could spark a repeat of the deadly EuroMaidan protests that toppled Kremlin-backed Viktor Yanukovych three months after his November rejection of the same pact.
"I am speechless," central Dnipropetrovsk region deputy governor Svyatoslav Oliynik wrote in a Facebook post.
"The last time this happened, we had EuroMaidan."
And Deputy Foreign Minister Danylo Lubkivsky cautioned after submitting his resignation that Poroshenko was sending "the wrong signal to everyone: the aggressor (Russia), our allies and, most importantly, the citizens of Ukraine."
But most analysts agree the threat of a furious Russia unleashing crippling trade restrictions on Ukraine that would sink its economy even further had left the staunchly pro-Western leader with little choice.
The free trade deal -- now not set to come into effect until 2016 -- is part of a broader Association Agreement the EU and Ukrainian parliaments are expected to ratify after years of negotiations that often verged on collapse.
Russian President Vladimir Putin had repeatedly tried to torpedo the talks out of fear that Ukraine would slip out of Moscow's orbit and ruin his dream of a post-Soviet bloc rivalling the European Union and NATO.
Following Yanukovych's rejection of the EU agreement last year, just days before it was due to be signed, Putin rewarded Ukraine with a $15-billion (11.5-billion euro) lifeline and slashed its gas price.
Ukraine's decision later to press on with the EU pact saw Moscow respond with a threat to ban most Ukrainian goods should the trade agreement enter into force this November as planned by Brussels and Kiev.
That grim scenario seemed decisive in Ukraine's decision to request and receive EU permission Friday to put free trade on the back burner.
Russian Economy Minister Alexei Ulyukayev quickly announced that Moscow now "pledges not to adopt protective measures" until the end of 2015.
Poroshenko said in his defence Monday that he was able to secure the right to "protect Ukrainian producers, the federal budget, and a (stable) exchange rate that will avert capital flight in wartime conditions."
But Prime Minister Dmitry Medvedev said Russia would be watching closely to make sure "there is no hidden implementation of these (free trade) rules".
- Delayed benefits, immediate pain -
Analysts believe Russia always had the upper hand in the trade debate because its restrictions would have delivered immediate pain on Ukraine.
About a quarter of Ukraine's exports go eastward -- the same as in the opposite direction to the 28 EU member states.
But the benefits of free trade with Europe would not be felt for up to a decade because the pact sets aside a "transitional period of a maximum of 10 years".
It also requires Ukraine to end its agricultural subsidies programme and bring down import barriers which help steel workers in the restive Russian-speaking east.
Putin warned Poroshenko last week that Ukraine's transition to EU trade standards would cost his country 165 billion euros ($213 billion) -- a figure far outstripping its 2013 gross domestic product.
The European Union tried to cushion the blow by immediately lifting most tariffs on Ukrainian products and offering Kiev a 1.6-billion-euro economic assistance package.
But even Brussels conceded the relaxed customs rules would only save Ukrainian exporters 500 million euros a year.
The limited trade restrictions Russia has already imposed on some Ukrainian food saw those exports alone shrink by a third in the first six months -- a loss that would reach at least 775 million euros on the year.
"The current state of the Ukrainian economy is such that the shocks (of Russian trade sanctions) dealt some industries such as engineering would simply be too much for the country to bear," incoming EU Commission vice president Valdis Dombrovskis told Kiev's Evropeiska Pravda news site.