Kiev Seeking Trade Bloc Observer Status

KIEV, Ukraine -- Ukraine is looking to become an observer at a Russian-led trade bloc and parties may finally agree on the status during a high-level meeting on May 29 in Astana, an official said Monday.

Andriy Honcharuk

Andriy Honcharuk, President Viktor Yanukovych’s top foreign policy aide, said the status would allow Ukraine to get involved in policy discussions at the Customs Union, and should not prevent closer integration with the European Union.

“We’re working out, and I stress we haven’t yet, the formula of cooperation with the Customs Union,” Honcharuk said at a press conference.

“A working group, led by Deputy Prime Minister Yuriy Boyko, has come up with a draft proposal that will be discussed.”

The comment comes a day after a surprise meeting between Yanukovych and Russian President Vladimir Putin in Sochi on Sunday.

Neither Putin nor Yanukovych made any remarks after the meeting, which lasted five hours.

The plan for obtaining the observer status at the Customs Union, which includes Russia, Belarus and Kazakhstan, comes after Putin has rejected Yanukovych’s earlier idea, known as ‘the formula 3+1’.

The idea called for Ukraine having a say in some of the Customs Union policies without actually getting a full-fledged membership, which would effectively prevent Ukraine’s further integration with the EU.

Honcharuk went to stress that the status will not be signed at the meeting in Astana on May 29, but will be rather “agreed.”

“It will be agreed,” Honcharuk said.

“Please, don’t make a mistake here” that it will be signed, he said addressing reporters.

The developments come as Ukraine has been also seeking to sign a free trade and political association agreement with the EU at a summit in November in Vilnius.

The plans for obtaining the observer status at the Customs Union may seem as controversial for a country that has been working to sign the agreement with the European Union.

Honcharuk’s remarks seem to allay those concerns.

Honcharuk also denied a newspaper report on Monday that Russia has agreed to grant Ukraine the observer status in exchange for getting a controlling stake in Ukraine’s natural gas transportation system.

“I would like to stress that these processes are not connected,” Honcharuk said.

“The two move in parallel mode.”

Yanukovych and Putin made little progress at their meeting in Zavidovo near Moscow on March 4 after Russia had refused to lower natural gas prices for Ukraine, according to Yanukovych.

Putin and Yanukovych planned, but skipped, a meeting in April.

Russia said earlier it would lower the prices if Ukraine joins the Customs Union, which is supposed to be renamed the Eurasian Economic Union in 2015 following a closer integration between the member states.

Yanukovych is likely to join the meeting of the Supreme Eurasian Economic Council, the top economic governing body of the Eurasian Economic Union on May 29 in Astana, Kazakhstan.

Russia has recently intensified its pressure on Ukraine with threats of trade restrictions and other measures to punish Ukraine in the event Kiev signs the agreement with the European Union.

Mikhail Zurabov, the Russian ambassador to Ukraine, warned on Saturday about “red lines” that will come into effect if Ukraine agrees to sign the agreement with the EU.

But there may be another reason for accelerated contracts between Yanukovych and the Customs Union leaders.

“By holding talks with the Customs Union, Ukraine is blackmailing the Europeans a little bit,” Volodymyr Fesenko, the head of the Penta political consultancy, said.

“That is, if the EU refuses to sign the political association and free trade agreement with Ukraine, the country would move towards the Customs Union.”

Source: Ukrainian Journal