What does WTO membership mean for Ukraine?
This is a very positive step for Ukraine. It means that Ukraine will be, when membership is ratified, a member of a global rule-based trading organisation. It will get certain benefits from that such as most-favoured nation treatment from all its WTO partners, access to the settlement procedures, and its trading partners will have to abide by the WTO rules, which are enforceable. It will also enable Ukraine to start negotiating a free trade agreement with the EU and the formal launch of the negotiations will take place on Monday (18 February) when Peter Mandelson comes to Kyiv. This will be a comprehensive free trade agreement, which will to a very considerable extent integrate Ukraine into the EUís internal market. This will attract foreign direct investment, and stimulate domestic investment, which will mean more economic activity, more jobs, more exports with the ultimate effect being a higher standard of living for the average Ukrainian citizen. Also, being a member of the WTO will stimulate competition and encourage Ukrainian enterprises to develop and modernise. Because of that, and because imports will be cheaper, it will mean the Ukrainian consumer will have a better choice of goods at a cheaper price.
How long will negotiations take on a free trade agreement between the EU and Ukraine?
Itís very difficult to say. I know that the Ukrainian side wants them to be completed very quickly and they are talking about completing them by the end of the year. Frankly, with my experience of other such negotiations, this is rather optimistic. I wouldnít like to put an exact time frame on it, but it might be eighteen months to two years. A free trade agreement is a very technical and detailed negotiation, and will therefore take time, but if both sides see eye to eye it could be concluded quicker.
Many see WTO membership as the first step towards full EU membership. Do you see this as a step in that direction?
Let me start by saying, negotiations for Ukraineís membership of the EU are not on the agenda at the moment. Thatís not a valued judgement, thatís a fact, but if Ukraine is to one day be a good candidate for membership of the EU there are lots of things it has to do, lots of reforms it has to undertake, including the commercial area. The sort of things we will be negotiating in our free trade agreement, which is not just the reduction of customs tariffs but the harmonisation of Ukrainian legislation with that of the EU, is an essential step on the road to eventual membership and in order to start that step you have to have membership of the WTO. So yes, joining the WTO is an essential first step on this rather long progress towards EU membership.
High import duties are often quoted as the main reason for the high cost of consumer goods here. Will WTO membership help in this area?
Yes, in some respects, the duties will be reduced but it is also fair to say that in many areas, Ukraineís duties at present are fairly low, unlike some other countries where before WTO membership duties were particularly high. One of the reasons we settled for a deep and comprehensive free trade agreement was that the level of tariff duties as a general rule were
ďThe preamble to the visa facilitation agreement does say that the ultimate objective should be visa-free travel for Ukrainians, but as things stand at the moment this is probably a fairly long-term prospectĒ
sufficiently low on both sides that just abolishing the tariff duties would not have a significant effect. Itís everything else that goes with it that will have the really significant effect. In some areas there will be a reduction of tariffs, but mostly they are not sufficiently high to make a dramatic difference to the general cost of living. The biggest reduction will be in importing cars where the tariff will come down from 25% to 10%.
Ukraine, especially when it comes to imports and customs, is renowned for corruption and black markets. Will WTO membership improve things in this area, and how quickly?
Reform of many areas of the administration, and the fight against corruption are essential parts of the EU-Ukraine relationship. It is written into our action plan in 2005. We finance projects and work with the Ukrainian authorities to help them improve matters. It is that, more than the WTO, that will help achieve the desired reform but clearly the WTO has rules and these have to be obeyed. However, our desire to work with the Ukrainian government and help them reform predates WTO accession
ďUkraine will start negotiating a free trade agreement with the EU and the formal launch of the negotiations will take place on Monday (18 February) when Peter Mandelson comes to KyivĒ
and this is a joint decision. The action plan signed between the EU and Ukraine does not represent something imposed upon Ukraine, it is Ukraineís choice.
A new Ukraine-EU Cooperation agreement is currently being negotiated. What changes is this likely to have?
What we are working on at the moment is called a new enhanced agreement and that will replace the existing partnership and cooperation agreement. The free trade agreement is part of this, so in addition to the trade aspects there are other areas such as political cooperation; justice, freedom and security which includes things such as immigration, asylum and trafficking; and other areas such as environment, energy, transport and so on. Negotiations for those parts other than free trade have been going on now for about a year. Weíve had six rounds of negotiations and weíve made very good progress. The aim is to have a much more ambitious agreement than the present partnership and cooperation agreement that will cover as many areas as possible, to envisage as much cooperation as possible and also to build into the agreement the sort of reforms, not just in the administration and the fight against corruption, but in all sectors such as energy and environment. So this will be a very comprehensive agreement which will work as a road map for our cooperation over the next few years.
Visa regimes for some EU states are particularly harsh. Prime Minister Yulia Tymoshenko is now pushing for a visa-free regime for Ukrainians wishing to enter the EU. Can you shed any light on whatís happening in that area?
We have negotiated a visa facilitation agreement which came into effect on 1 January 2008, and this aims to make it easier for many categories of Ukrainian citizens to get visas, for example businessmen, journalists, sportsmen, people who go abroad on academic exchanges and so on. It envisages, depending on the category, multi-entry visas with a validity of 1-5 years. It also envisages simplifying and harmonizing the documentation required to get a visa. Itís very early days yet, and Iím sure the agreement is not yet working perfectly, but the agreement also envisages the creation of a joint committee between the EU and Ukraine to monitor the implementation of the agreement and to suggest improvements where necessary. The committee will probably meet for the first time in April to have a first look at how things are going. Iím sure that over a period of time, once everything settles down, people will see that this represents a major improvement. Of course, it does not go as far as Ukrainians would like, and they are now saying they would like to begin discussions on a visa-free regime for Ukrainian citizens wishing to enter the EU. Now, the preamble to the visa facilitation agreement does say that the ultimate objective should be visa-free travel for Ukrainians, but as things stand at the moment this is probably a fairly long-term prospect. The advice we give, however, is letís first implement the visa facilitation agreement, see how it works, and then we can see, because at this stage there are a number of member states who would find it very hard to contemplate a visa-free system.
Can you tell us how long it might take for Ukrainian people to get visa-free travel in the EU?
Itís impossible to put a time line on this, but one thing I would say is that in our action plan all we had agreed to do was have exploratory talks about a visa facilitation agreement, and now, three years later, weíve already got one. This is not to say that the next step will follow very quickly but it illustrates that you canít quite predict how fast or how slow these things will go.
How long will it be before Ukraine is a full member of the EU?
I will say what I always say when asked this question. That is the wrong question. The right question would be, what can we do over the next three or four years to bring Ukraine much closer to the EU in terms of cooperation and harmonisation of its laws and standards to EU laws and standards, and we can do a lot in this area.
The first Black Sea conference took place 14 February. How did that go?
It went very well. It was the first such meeting within what we call the Black Sea synergy, which was a policy the EU developed because we felt with our eastern neighbours we didnít have any regional dimension. With our southern neighbours, the Mediterranean countries, we do - there is a regional framework within which we can cooperate - but this didnít exist for our eastern partners. When, on 1 January 2007, Bulgaria and Romania became EU members this meant that the EU now had its toes in the Black Sea and therefore we thought this would be a good thing. Our aim is not to introduce new policies or create new sources of funding, but basically make use of whatís there. We have a close relationship with all the countries of the Black Sea, and the word synergy implies we want to take all these different bilateral policies, put it all together and try to do activities that will cover the Black Sea as a whole. There are some obvious areas needing to be addressed like pollution, maritime safety, diminishing fishing stocks and transport. We want to build on what is there and draw all our partners in that area into a more regional approach.
It seems that Russia pays very close attention to Ukraineís global integration, especially when it comes to the EU and NATO, as Putinís recent remarks highlighted once again. In this regard, is the EU concerned about what will happen to the gas supplies should Ukraine join the EU or NATO?
Well, it seems to me that Russia is pretty relaxed about whether Ukraine joins the EU or not. The question of NATO membership is more vexed. Obviously we follow the gas question very closely because gas from Russia transits Ukraine and this represents a substantial part of the EUís energy supply, more so for some member states than others. We take an interest in what goes on, and it is normal that we should do so. One should note that Russia and Ukraine have repeated their pledges of cooperation Ė Ukraine has repeated its pledge to be a good partner, and Russia has repeated its pledge to ensure supply to the European market Ė and these pledges are respected. Clearly, every time there is a problem we take a very close interest in it. Energy cooperation with Ukraine is one of the largest areas of cooperation. We have a memorandum of understanding with Ukraine which we signed in December 2005, and cooperation in the energy sector is working very well.