The European Union and Ukraine initialled the Deep and Comprehensive Free Trade Area
Agreement (DCFTA) on 19 July 2012. The scope of the agreement which the EU and Ukraine
reached following their negotiations is much more extensive than that of a typical free trade
agreement. It envisages not only the lifting of tariff and extra-tariff barriers but also, more
importantly, Kyiv adopting EU legal solutions and standards in this area.
Whether the agreement will be signed and implemented is still an open question and depends
on the existing political conditions. On the one hand, the repression imposed by the government
in Kyiv on its political opponents (including the detention of the former prime minister,
Yulia Tymoshenko) has provoked criticism from the EU, which refuses to sign the agreement
if the government in Kyiv continues to violate democratic principles. The manner in which
Ukraine’s parliamentary elections are conducted this October will be the key test. On the
other hand, Russia is increasingly active in its efforts to involve Ukraine in the integration projects
it has initiated (the Customs Union and the Eurasian Economic Community). It should be
noted that Moscow has effective instruments to exert its will, such as the dependence of the
Ukrainian economy on supplies of Russian oil and gas and on exports to the Russian market.
Besides, Moscow also has political instruments at its disposal.
It is impossible to participate in integration projects both with the EU and with Russia.
Therefore, Kyiv will have to make a strategic decision and choose the direction of its economic
integration. Unless Ukraine takes concrete action to implement its agreements with the EU,
primarily including the free trade agreement, its economic dependence on Russia will grow,
and it will be more likely to join the Russian integration projects