Michael Emerson and Veronika Movchan (Centre for European Policy Studies)
The Stabilization and Association Agreement (SAA) between the EU and Ukraine was signed in Vilnius already in November 2013. It was, however, ratified by Ukraine only in September 2014 following its refusal by the then President Yanukovych, Euromaidan and Russia’s subsequent aggression in the east of the country. EU Member States ratified the agreement only throughout 2015 and early this year and the Netherlands has not ratified it yet. What are the relationships between the EU countries and Ukraine like after the ratification of the SAA?
The essential elements of the SAA are the respect for human rights and fundamental freedoms and the rule of law. Regarding human rights in Ukraine, we encounter the problem of enforcing the right to a fair trial. The rule of law is the weakest aspect of democratic governance in the country. However, reforms meant to bring about a significant improvement in the situation were implemented in June. The newly passed laws have particularly affected the judiciary, which is considered, together with the police and public administration, as the most corrupt institution in Ukraine.
The signing of the SAA also means the possibility of the facilitation of travel for Ukrainian citizens to the EU. Therefore, in December 2015, the European Commission recommended the cancellation of visas. The Council allowed Ukrainian citizens to travel to the EU visa-free in case of tourist travel, but only with biometric passports. The completion of the process of launching a visa-free regime is now in the hands of the European Parliament.
Regarding public procurement, it is regulated by the Deep and Comprehensive Free Trade Area (DCFTA), which is an important part of the SAA. DCFTA also addresses market access, which does liberalize but in a very asymmetric way. While the EU has a fully liberalized market, Ukraine is expected to have one within three to seven years. DCFTA deals with customer service, technical standards for industrial products, food safety regulations, intellectual property rights and services in general. Public contracts are of high importance for both the EU and Ukraine. They account for approximately 18 percent of the EU’s GDP, and thus offer a huge potential market for Ukrainian companies. A reform of public procurement policy has been the government‘s priority for several years and, due to the fiscal deficit, the need for fiscal consolidation and better public spending, it will also remain one of the top priorities in the coming years.
How successful reforms in Ukraine will be remains a question for the future. In case they are successful, we can expect that this will lead especially to the strengthening of economic relations between the EU Member States and Ukraine. However, predicting future development is fairly problematic in light of the ongoing war in eastern Ukraine, which could significantly destabilize the country and also affect the implementation of reforms.
The study can be downloaded here