AMBASSADOR'S BLOG - UKRAINE AND EU: HOW TO MAKE PROGRESS

Kyiv
30.06.10




How can we tell if Ukraine is serious about Europe?  A couple of weeks ago, when I blogged about a steamy event in Mariupol I noted that how Ukraine addressed economic reforms and took forward negotiations on the deep and comprehensive Free Trade Area with the EU would be a good indicator.  As an example, I noted the need for the Rada to adopt a good public procurement law as soon as possible.

So I was delighted that on 1 June the Rada adopted a new public procurement law.  Experts who have looked at the new legislation tell me that it is pretty good.  Congratulations are due to the government and the Rada for a useful step forward.  Public procurement sounds a rather obscure issue.  But it is estimated to account for 5-20% of Ukrainian GDP.  At the moment, many tenders are won by sole bidders - bad for corruption, and bad for Ukrainian taxpayers.  The new law, if properly applied, should help change that.

Negotiations on the deep and comprehensive Free Trade Agreement (the "DCFTA"), meanwhile, continue.  The UK, like other EU member states, attaches enormous importance to this process.  The DCFTA will cut tarrifs on 95% of the goods traded between the EU and Ukraine and harmonise large parts of Ukraine's legislation to EU standards.  It will provide for the gradual integration to the fullest possible extent with the EU's internal market of 500 million wealthy consumers (to get some idea of how wealthy, check this interesting map).  This should have a big impact on Ukraine, including increasing economic growth; increasing Ukraine's exports to the EU (some estimates are that they could double); and driving down costs.  Not everyone in Ukraine will benefit: inefficient Ukrainian companies who are making big money through cosy deals and a lack of competition will find life harder.  But the overwhelming majority of Ukrainians will be better off.  Harmonising legislation will also improve the quality of government and help reduce corruption.  In other words, the DCFTA will help Ukraine to become a modern European country. 

The importance of this process and the fact that huge amounts of money are involved means negotiations are tough.  It's vital that at the next round, the Ukrainian side is fully prepared across the whole breadth of these important technical discussions, with a real negotiating mandate to move the process forward.  Let's hope that happens, so that Ukraine can make another step towards practical integration with the European Union.    

Leigh Turner
British Ambassador to Ukraine


NOTE:  You can read all of Ambassador Turner's blogs by visiting: http://blogs.fco.gov/roller/turner



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