The Japan Times
November 29, 2013, Friday


The Ukraine tug of war



Russian President Vladimir Putin has won an important foreign policy
victory with the decision by Ukraine to suspend talks on an
association agreement with the European Union. Putin countered the EU
offer with threats and blandishments of his own. While Ukrainian
officials insist that the door remains open, there is no mistaking
Kiev's decision to cast its lot with Russia.

Association status is the EU's way of building ties with countries
short of membership.



The EU negotiates a framework agreement with a third country that
typically focuses on economic, trade, political, social or security
ties. Free trade agreements with nonmember states are association
agreements.

Ukraine first voiced a desire to conclude some sort of association
agreement with the EU in 1994, and various negotiations have been held
since then. Talks on a free trade agreement began in 2008, and the
next year, Ukraine was identified as one of the six post-Soviet states
that would join "the Eastern Partnership" with the EU. This concept
was intended to provide a framework for discussion of contentious
issues without having to join the EU. In addition to facilitating the
resolution of these problems, the Eastern Partnership would extend EU
influence to the east, and help reorient those former Soviet states to
the West, lessening Russian sway over those governments. The Ukraine
association agreement was to have been signed at an EU summit this
week in Lithuania.

Well aware of European intentions, Moscow has done its best to
frustrate those plans. It has proposed a rival trade bloc, imposed
trade restrictions on Ukraine and threatened even worse if the deal
goes through. The EU has helped Ukraine secure future gas supplies,
promised 300 million in annual aid and ensured that $822 million is
available via the International Monetary Fund. Ukraine President
Viktor Yanukovich has said that that is not enough money to make the
deal a winner for his country, however.

According to Yanukovich, the deal would cost Ukraine $500 billion in
trade with Russia and the adoption of EU standards would add another
$100 billion to the tab.

The EU's demands for political reform did not help its case. As part
of the association deal, the EU sought the release from prison of
opposition leader Yulia Tymoshenko. The former prime minister is
considered the target of political payback, and her release would be
the most tangible sign that Ukraine seeks to reform its political
system. (The Ukraine government denies that it has engaged in
selective prosecution or that Tymoshenko is treated differently from
any other citizen.) It was proposed that Tymoshenko be released on
medical leave for treatment abroad for her back problems. Six
different versions of legislation designed to free Tymoshenko for
medical reasons were defeated by Yanukovich's party. On Monday, she
declared a hunger strike. While Yanukovich insists that the government
has not turned its back on the EU and that many of the reforms that
would be required are going to occur anyway, the die appears to have
been cast. Ukraine will now focus its efforts on reaching a deal with
Moscow.

The pressure on Ukraine follows Russian efforts to get Armenia to
change course. It too was going to join the free trade agreement with
the EU but it abruptly abandoned those plans in September after
Armenian President Serzh Sarkisian had an emergency meeting with Putin
and days after Russia concluded a multi-billion dollar arms deal with
Azerbaijian, Armenian'srival. There is speculation that Sarkisian
changed his mind to avoid losing Russian support in the conflict over
Nagorno-Karabakh.

While Georgia and Moldova are still expected to sign agreements with
the EU this week in Lithuania, the loss of Ukraine, a country of 46
million people, will be a blow to the EU's plans to extend its reach
eastward. There is speculation that Ukraine is just bargaining.
Yanukovich is said to fear Tymoshenko's re-emergence as a rival in the
next presidential campaign. His party's rejection of her release is,
according to this logic, a way to change the terms of the deal.

That is an over-optimistic reading. Putin is strongly opposed to the
agreement. His Russia, a great power that seeks to reclaim its
superpower status and the respect of the rest of the world, will not
abandon its interests in the near abroad, and certainly not in
Ukraine, which is considered by many to be the cradle of Russian
civilization. There is talk of a joint Ukraine, Russia and EU trade
commission that would effectively give Moscow a say over economic
relations in Eastern Europe.

There are some lessons to be drawn from these developments. The first
is the readiness of the Russians to play hardball and inflict real
pain on those nations with which it has serious political disputes.
Moscow sees no distinction between economics and politics. Second, the
EU is not prepared to play hardball of this nature. If it truly seeks
to enlarge its influence, then it must decide which is more important
- the expansion of its political influence or the spread of its
political systems.

It is not clear if a loosening of demands regarding Tymoshenko would
have made a difference, but Brussels did not appear interested in
finding out. That is shortsighted thinking in a serious geopolitical
contest.