EU Grants Ukraine 'Market Economy' Status

Ukrainian President Viktor Yushchenko (L) and British Prime Minister Tony Blair prior to the summit (AFP) 1 December 2005 -- The European Union has announced that it recognizes Ukraine as a market economy.

The formal announcement was made in Kyiv by U.K. Prime Minister Tony Blair.


"I hope and believe that this is not merely the most successful summit that has been between the European Union and Ukraine but also a very powerful omen for what is to come. And you can rest assured that in that progress towards a shared future, the European Union and countries like UK will be your partners," Blair said.



The president of the European Commission, Jose Manuel Barroso, said that Ukraine has "come a very long way in a very short time" and that market economy status would be introduced as soon as a few remaining procedures had been introduced.


The commission said today that it has undertaken a technical study and that Ukraine had fulfilled all requirements. The likelihood was that the new status would come into effect by the beginning of 2006.


President Yushchenko was quick to welcome the decision.


"An important result of today's summit is [the acknowledgment] that Ukraine has met five technical criteria to obtain the status of a market-economy country. We hope that the formalization of this political decision will not take a long time," Yushchenko said.


Anti-Dumping


The most significant benefit of the change is that Ukraine will now be better protected against charges of illegally dumping goods on the European market.


The EU uses a series of anti-dumping measures to prevent states outside the union selling cheap goods on the EU market. Any country that takes anti-dumping measures against Ukraine in the future will have to prove its case, whereas hitherto the onus of proof has been on Ukraine.


The EU has overtaken Russia as Ukraine's leading trade partner so this is an important decision for Kyiv. Many observers, however, believe the political symbolism of the decision is likely to be more significant than the trade benefits -- at least in the short term.


President Yushchenko's hope is that the decision to grant market economy status is a sign of progress towards eventual membership of the EU.


"We will do everything possible within the framework of this strategic policy and this strategic goal [to join the EU] to make the European community and, first of all, EU citizens see that Ukraine's EU membership will bring not additional problems, but new benefits," Yushchenko said.


The Ukrainian leader has been harshly criticized for failing to make more progress since being swept to power by the Orange Revolution a year ago. This could help redress the balance in his favor.


But the EU will be looking for more -- not least free and fair parliamentary elections in March and, after that, faster progress toward bringing Ukrainian legislation in line with EU standards.