Ukraine signed the long-awaited Association Agreement with the European Union (EU) in Brussels on 21 March 2014. The Agreement was signed between Ukrainian Interim Prime Minister Arseny Yatseniuk, EU President Herman Van Rompuy on the sidelines of an EU summit in Brussels.
The Association Agreement tries to establish more closer political and economic cooperation between the EU and Ukraine.
Also, the European Commission agreed to extend nearly 500 million euros worth of trade benefits to Ukraine, removing customs duties on a wide range of agricultural goods, textiles and other imports.
However, agreement concerning free trade will only be signed once presidential elections are over and a new government is formed. Ukraine will be holding the presidential elections on 25 May 2014.
The signing of the agreement coincided with the Russian President Vladimir Putin signing the Accession Agreement with Crimea after the Russian Parliament passed it on 21 March 2014.
Analysis
The Association Agreement was proposed by the EU to Ukraine in November 2013. However, it was rejected by the then Ukrainian President Viktor Yanukovich. The rejection resulted into mass protests in Ukraine leading to Yanukovich taking exile in Russia and Russia annexing Crimea in March 2014. The occupation drew criticisms and sanctions on Russia from the EU and US.
Although the Assoication Agreement has far more potential to strengthen the shattered economy of Ukraine. However, it poses certain challenges that need to be tackled by Ukraine. These include among others
• Risk of inviting retaliatory steps from Russia. Russia already has imposed stricter customs checks on trade with Ukraine.
• Changes to the rule of law and justice.
• Adopting business and environmental standards.
To meet these challenges Ukraine will have to put in hard work and long-term investment.
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