Ukraine-EU trade deal: Business seeks delay, quarreling MPs stall

The prospects for Ukraine signing a key Euro-integration deal this month look remote as the country's business tycoons suggest delaying the move by at least a year and parliament has stalled a vote that could free jailed ex-PM Yulia Tymoshenko.

Kiev may sign the EU Association Agreement, a free trade agreement that paves the way for eventual membership in the union, at the EU's Eastern Partnership summit in Vilnius on November 28-29. However it faced strong resistance from Russia, which wants Ukraine to be part of the Moscow-led Customs Union along with Belarus and Kazakhstan. Ukrainians themselves are also split in their opinion over their country’s strategic course.

The split was underlined at a meeting of leaders from Ukraine’s major industries and unions with President Viktor Yanukovych. At the closed-door session they voiced their concern that Ukraine’s battered economy is not ready to be opened up to its strong Western neighbor. 

“If it is possible, let’s postpone the signing [of the Association Agreement] by a year. Give us a chance to prepare more, to buy equipment. This is not only my request, it’s a request from industrialists,” Valentin Landyk, President of the Nord Group holding said at the Tuesday meeting as cited in a statement released by the president’s office.

The business captains asked the government to take several measures, which would raise the competitiveness of the Ukrainian economy before integrating with the EU, Kommersant Ukraine business daily reports. Those included boosting domestic demand, making credit cheaper, lowering taxes and normalizing trade relation with the Customs Union members.

Yanukovych did not comment on the proposition to delay signing of the trade deal, but ordered his government to review the concerns. Both the president and Ukraine’s ruling Party of Regions insist that Ukraine’s course for European integration is firm and that Kiev has every intention of signing the agreement.

“I believe we have all the preconditions for a positive result [at the summit],” Foreign Minister Leonid Kozhara reiterated on Wednesday, adding that only political issues need to be settled.

The intention however saw another setback on Wednesday when the Ukrainian parliament, the Verkhovna Rada, postponed a vote on a bill, which would allow former Prime Minister Yulia Tymoshenko, who is serving a prison term now, to go to Germany for treatment of back pain. The delay until Tuesday next week was caused by the failure of a working group preparing the bill to find a compromise alternative.

The European Union considers Tymoshenko, sentenced to seven years for overstepping her authority during her term in office, a political prisoner. Releasing her is one of major conditions for Ukraine to be granted a free trade deal.

The bill would allow a long-term transfer of Tymoshenko outside of Ukraine due to health reasons, which would constitute a de facto release.

The ruling party accused opposition parties of derailing the work, saying they bombarded the working groups with amendments and gave them no time to review them.

“There is a growing suspicion that you’ve been playing a show for the voters, while imagining yourselves candidates at the next presidential election, and you don’t even intend to solve the Tymoshenko issue,” Regions’ parliamentary faction leader Aleksandr Efremov lashed out.

“You’ve been deceiving European representatives while trying to frame the Ukrainian authorities,” he added in a reference to this week’s visit of a European Parliament observer mission to review the preparation for the Vilnius summit.

Meanwhile some opposition members are accusing Yanukovych of spinning the public opinion for an eventual failure to sign the deal. Tymoshenko said the president “has in the last weeks already been kicking the Association Agreement to death” in a statement. And opposition leader Arseny Yatsenyuk has called for an investigation over whether the president committed treason by traveling to Russia last weekend for a meeting with Russia’s President Vladimir Putin.

"Right from the start Yanukovych did not want to sign anything with the European Union," Tymoshenko ally Yatsenyuk wrote bitterly on Twitter. "He played and outplayed even himself."