EU: Ukraine Deal Awaiting Action On Tymoshenko

BRUSSELS, Belgium -- The European Union said on Thursday it had reached a technical agreement with Ukraine on a free trade deal, but linked its implementation on Kiev's treatment of the jailed former prime minister and opposition leader, Yulia Tymoshenko.

EU Trade Commissioner Karel De Gucht.

EU Trade Commissioner Karel De Gucht said the agreement was reached during talks with Ukraine's Deputy Prime Minister Andriy Klyuyev, two days after a visit by President Viktor Yanukovych was indefinitely postponed when it became clear that Tymoshenko would not be immediately released.

"It is now up to the Ukrainian leadership to create the political conditions wherein this deal can materialize," De Gucht told a European Parliament committee.

He said the deal could be fully concluded by the end of the year "of course provided that the political conditions are created so that this deal can happen in practice."

Klyuyev told reporters that Ukrainian leaders were doing "everything to eliminate all obstacles" toward the association deal.

"The Ukrainian President together with parliament are now doing everything in order to solve this problem," Klyuyev said, in remarks confirmed by his press office.

The breakthrough was the latest development in a turbulent week of EU-Ukraine relations.

Tymoshenko was sentenced to seven years in prison last week on charges of abuse of office for her role in the signing of a natural gas import contract with Russia in 2009.

She dismissed her trial as Yanukovych's attempt to bar her from parliamentary elections next year.

The EU joined the United States in condemning the conviction as politically motivated and called for political and judicial reform to overturn the conviction and prevent similar cases in the future.

Despite the decision to call off the visit of Yanukovych, the EU kept stressing the importance of the free trade deal and said negotiations should not be held hostage by political events.

The EU has said it could greatly expand the euro28.7 billion ($39.6 billion) annual trade flow between the two.

The EU accounts for a third of Ukraine's exports and the agreement could boost that further.

"It would open each others' markets, it would modernize and diversify Ukraine's economy, and, most important of all, it would be a milestone in sharing our common European values," De Gucht said.

Source: Bloomberg