EU-Ukraine Associaton Agreement “Guide to the Associaton Agreement” ++++ Background: Relatons between the EU and Ukraine are currently based on the Partnership and Co-operaton Agreement (PCA) which entered into force in 1998. At the Paris Summit in 2008 the leaders of the EU and Ukraine agreed that an Associaton Agreement should be the successor agreement to the Partnership and Co-operaton Agreement. The EU-Ukraine Associaton Agreement (AA) is the frst of a new generaton of Associaton Agreements with Eastern Partnership countries. Negotatons on this comprehensive, ambitous and innovatve Agreement between the EU and Ukraine were launched in March 2007. In February 2008, following confrmaton of Ukraine’s WTO membership, the EU and Ukraine launched negotatons on a Deep and Comprehensive Free Trade Area (DCFTA) as a core element of the Associaton Agreement. At the 15th Ukraine-EU Summit of 19 December 2011, the EU leaders and President Yanukovych noted that a common understanding on the text of the Associaton Agreement was reached. On 30 March 2012 the chief negotators of the European Union and Ukraine initalled the text of the Associaton Agree - ment, which included provisions on the establishment of a DCFTA as an integral part. In this context, chief trade ne- gotators from both sides initalled the DCFTA part of the Agreement on 19 July 2012.
EU-Ukraine Associaon Agreement “Guide to the Associaon Agreement”
++++Background: Relaons between the EU and Ukraine are currently based on the Partnership and Co-operaon Agreement (PCA) which entered into force in 1998. At the Paris Summit in 2008 the leaders of the EU and Ukraine agreed that anAssociaon Agreementshould be the successor agreement to the Partnership and Co-operaon Agreement. TheEU-Ukraine Associaon Agreement(AA) is the first of a new generaon of Associaon Agreements with Eastern Partnership countries. Negoaons on this comprehensive, ambious and innovave Agreement between the EU and Ukraine were launched in March 2007. In February 2008, following confirmaon of Ukraine’s WTO membership, the EU and Ukraine launched negoaons on aDeep and Comprehensive Free Trade Area (DCFTA)as a core element of the Associaon Agreement. At the 15th Ukraine-EU Summit of 19 December 2011, the EU leaders and President Yanukovych noted that a common understanding on the text of the Associaon Agreement was reached. On 30 March 2012 the chief negoators of the European Union and Ukraine inialled the text of the Associaon Agree-ment, which included provisions on the establishment of a DCFTA as an integral part. In this context, chief trade ne-goators from both sides inialled the DCFTA part of the Agreement on 19 July 2012. Both EU and Ukraine expressed their common commitment to undertake further technical steps, required to prepare conclusion of the Associaon Agreement.
++++Polical associaon and economic integraon: The Associaon Agreement will constute a new stage in the development of EU-Ukraine contractual relaons, aiming atpolical associaon and economic integraonand leaving open the way for further progressive developments. The AA provides for a shared commitment to a close and lasng relaonship, based on common values, in parcular full respect for democrac principles, rule of law, good governance, human rights and fundamental freedoms. >Wide range of sector cooperaon: Thisambious and pioneering Agreement is a concrete way to exploit the dynamics in EU-Ukraine relaons, focusing on support to core reforms, on economic recovery and growth, governance and sector co-operaon in more than 30 areas, such as energy, transport, environment protecon, industrial and small and medium enterprise (SME) cooperaon, social development and protecon, equal rights, consumer protecon, educaon, training and youth as well as cultural cooperaon. >Trade and Trade related maers (DCFTA): Closereconomic integraon through the DCFTA will be apowerful smulant to the country’s economic growth. Approximaon of Ukraine to EU legislaon, normsand standards, will be the method. As a core element of the Associaon Agreement, the DCFTA willcreate business opportunies in both the EU and Ukraine and will promote real economic modernizaonand integraon with the EU. Higher standards of products, beer services to cizens, and above allUkraine’s readiness to compete effecvely in internaonal markets should be the result of this process. >Mobility:The importance of the introducon of a visa free travel regime for the cizens of Ukraine in due course, 1
provided that the condions for well-managed and secure mobility are in place is recognised in the Agreement.
++++Content of the Associaon Agreement The EU-Ukraine Associaon Agreement counts in total over 1200 pages and comprises of > APreamblean introductory statement of the Agreement, seng out the Agreement’s purpose and asunderlying philosophy; >Seven Titleswhich concern General Principles; Polical Cooperaon and Foreign and Security Policy; Jusce Freedom and Security; Trade and Trade related maers (DCFTA); Economic and Sector Cooperaon; Financial Cooperaon with An-Fraud Provisions, as well as Instuonal, General and Final Provisions; > 43Annexesseng out EU legislaon to be taken over by a specific date and > ThreeProtocols. The Associaon Agreement in a nut-shell: > The AA aims toaccelerate the deepening of polical and economic relaonsbetween Ukraine and the EU,as well as Ukraine’s gradual integraon in the EU Internal Market including by seng up a DCFTA. > The AA is a concrete way to exploit the dynamics in EU-Ukraine relaons, focusing on support to corereforms, on economic recovery and growth, governance and sector co-operaon. > The AA constutes alsoa reform agenda for Ukraine, based around a comprehensive programme of Ukraine’s approximaon of its legislaon to EU norms, around which all partners of Ukraine can align themselves and focus their assistance. > The AA negoaons werenot a stand-alone exercise: EU assistance to Ukrainelinked with the reform isagenda as it emerges from the result of negoaons. The Comprehensive Instuonal Building Programme (CIB) is parcularly important in this regard.
++++Preamble ThePREAMBLEa selecon of the most important areas/facts pernent to EU-Ukraine relaons. It sets out the is ambion for a close and lasng relaonship. Although it has a non-binding introductory character, it presents important references to common values and could be perceived as a “scene-seer” for the Agreement. The elements which are set out in the Preamble include among others: > A reference tocommon valueson which the EU is built – namely democracy, respect for human rights and fundamental freedoms, and rule of law – and which are shared by Ukraine. > A reference that Ukraine is recognised as aEuropean countrywhich shares a common history and common values with the Member States of the EU. > A reference to theEuropean aspiraons of Ukraine. The EU welcomesUkraine’s European choice, including its commitment to build deep and sustainable democracy and a market economy. > An acknowledgement that thepolical associaon and economic integraonUkraine with the EU will of depend on progress in the implementaon of the Associaon Agreement as well as Ukraine’s track record in ensuring respect for common values, and progress in convergence with the EU in polical, economic and legal areas.
++++ Title I:General Principles Title Idefines the general principles which will form the basis for the domesc and external policies of the Associaon between the EU and Ukraine namely: >Respect for democrac principles, human rights, fundamental freedoms and the rule of law.>Thepromoon of respect for the principles of sovereignty and territorial integrity, inviolability of borders and independence, as well as countering the proliferaon of weapons of mass destruconare set out. Moreover, the principles of afree market economy, good governance, the fight against corrupon, the fight against differ-ent forms of trans-naonal organised crime and terrorism, the promoon of sustainable development as well as effecve mullateralismare central to enhancing the relaonship between the EU and Ukraine and will underpin their relaonship.
2
++++ Title II:Polical dialogue and reform, polical associaon, cooperaon and convergence in the field of foreign and security policy InTitle II, the Associaon Agreement foresees the intensificaon of the EU-Ukraine polical dialogue and cooperaon in view of gradual convergence in the area of Common Security and Foreign Policy (CSFP) as well as Common Security and Defense Policy (CSDP). > Title II covers issues such as theaims of polical dialogue, dialogue and cooperaon on domesc reform as well as foreign and security policy. > The Agreement foresees severalfora for the conduct of polical dialogue: the EU-Ukraine Summit willpresent the highest level of polical dialogue. At ministerial level the dialogue will be conducted within the Associaon Council. The polical dialogue will aim inter alia: >>todeepen polical associaonand increase polical and security policy convergence and effecveness; >>to promoteinternaonal stabilityand security based on effecve mullateralism; >>to strengthen cooperaon and dialogue oninternaonal security and crisis management, notably in orderto address global and regional challenges and key threats; >>to foster result-oriented and praccal cooperaon for achievingpeace, security and stability on the Europeanconnent; >>to strengthen respect fordemocrac principles, the rule of law and good governance, human rights andfundamental freedoms, including the rights of persons belonging to naonal minories, non-discriminaonof persons belon ing to minories and respect for diversity, and to contribute to consolidangdomesc polical reforms. > Title II dedicates a specific arcle on theInternaonal Criminal Courtand calls on the cooperaon of the EU and Ukraine in promong peace and internaonal jusce by rafying and implemenng the Rome Statute of the Internaonal Criminal Court and its related instruments. ++++ Title III:Jusce, Freedom and Security Title III coversissues concerning the rule of law and respect for human rights; protecon of personal data; cooperaon on migraon, asylum and border management; treatment of workers; mobility of workers; movement of persons; money laundering and terrorism financing; cooperaon on the fight against illicit drugs; the fight against crime and corrupon; cooperaon in fighng terrorism and legal cooperaon. > The EU and Ukraine commit through the Associaon Agreement to increase theirdialogue and cooperaon on migraon, asylum and border management. The importance of the introducon of a visa free travel regime for the cizens of Ukrainein due course, provided that the condions for well-managed and secure mobility are in place is recognised in the Agreement > The commitment tocombang organised crime and money laundering, to reducing the supply of and demand for illicit drugs and to stepping up cooperaon in the fight against terrorism is also reflected in the Agreement. > The wish to enhancepeople-to-people contactsis explicitly set out. ++++ Title IV:Trade and Trade-Related Maers The EU is Ukraine’s main commercial partner and accounts for 31% of its external trade, ahead of Russia (2010). Closer economic integraon through the DCFTA will be a powerful smulant to the country’s economic growth. As a core element of the Associaon Agreement, the DCFTA will create business opportunies in Ukraine and will promote real economic modernizaon and integraon with the EU. Higher standards of products, beer services to cizens, and above all Ukraine’s readiness to compete effecvely in internaonal markets should be the result of this process. >Hence theDCFTA Title IVthe Associaon Agreement is dedicated to Trade and Trade Related Maers. of Through a Deep and Comprehensive Free Trade Area economic integraon is envisaged. >The DCFTA, linked to the broader process of legislave approximaon will contribute to further economic integraon with the European Union’s Internal Market. This includes the eliminaon of almost all tariffs and barriers in the area of trade in goods, the provision of services, and the flow of investments (especially in the energy sector). Once Ukraine has taken over the relevant EU acquis, the EU will grant market access for example in areas such as public procurement or industrial goods. >The DCFTA will provide for a conducive new climate for economic relaons between the EU and Ukraine. New 3
trade and investment opportunies will be created and compeon will be smulated. All these elements are factors crucial to economic restructuring and modernisaon. As regards the impact of a removal of customsdues entailed by the DCFTA, experience has shown that this short-term loss of import charges will bemore than compensated for by the increased revenue received by the state from indirect taxes paid bycompanies seizing new market opportunies and by the general boost to the economy. The budget spending on legal and instuonal reforms in trade-related areas is or will be supported by the EU along with funds fromInternaonal Financial Instuons. The DCFTA once in force will provide tariff cuts which will allow theeconomic operators of both sides to save around 750 millions euros per year in average (most of the customs dues being liſted) ++++ Title V:Economic and sector cooperaon Title V comprises 28 chaptersthe fields of energy cooperaon; macro-economic cooperaon; management of in public finances; taxaon; stascs; environment; transport; space; cooperaon in science and technology; industrial and enterprise policy; mining and metals; financial services; company law, corporate governance, accounng and auding; informaon society; audio-visual policy; tourism; agriculture and rural development; fisheries and marime policy; Danube river; consumer protecon; cooperaon on employment, social policy and equal opportunies; public health; educaon, training and youth; culture, sport and physical acvity; civil society, cross-border and regional cooperaon; parcipaon in European Agencies and Programmes, based ongradual approximaon with the EU acquisand also – where relevant – with internaonal norms and standards. ++++ Title VI:Financial cooperaon, with an-fraud provisions The European Union and its Member States connue to be the largest donor to Ukraine: since 1991, assistance provided by the European Union alone has amounted to over €2.5 billion. The European Neighbourhood Policy Instrument (ENPI) allocates € 470 million to Ukraine for the years 2011-2013. This goes to support acon in three priority areas: good governance and the rule of law; facilitang the entry into force of the Associaon Agreement, and sustainable development, including energy and environment. This amount includes funding under the Eastern Partnership for theComprehensive Instuon Building programme43.37 million). The laer is designed to (€ improve the administrave capacity of partner countries and their compability with EU instuons, for instance through twinning programmes, professional training and secondment of personnel. > Ukraine will benefit from EU Financial Assistance through exisng funding mechanisms and instruments in order to achieve the objecves of the Associaon Agreement. > The future priority areas of the EU Financial Assistance to Ukraine will be laid down in relevant indicaveprogrammes reflecng agreed policy priories between the EU and Ukraine. The indicave amounts ofassistance will take into account Ukraine’s needs, sector capacies and progress with reforms. > EU assistance will be implemented in close cooperaon and coordinaon with other donor countries,donor organisaons and Internaonal Financial Instuons (IFI), and in line with internaonal principles of aideffecveness. Through the Neighbourhood Investment Facility (NIF), to which Ukraine is eligible IFIinvestments could be leveraged. The NIF aims at mobilising addional funding to cover the investmentneeds of Ukraine for infrastructures in sectors such as transport, energy, the environment and social issues (e.g. construcon of schools or hospitals). > The Agreement lays down that the EU and Ukraine will take effecve measures to prevent and fight fraud, corrupon and any other illegal acvies. ++++Title VII:Instuonal, general and final provisions The Associaon Agreement foresees a tailor-made instuonal set up for EU-Ukraine relaons. > At thetop level, the EU-Ukraine Summit will be established: The Summit will present the highest level of polical dialogue and will be a plaorm for meengs between Presidents. >At ministerial level, the dialoguewill be conducted within the Associaon Council which could meet in any configuraon. The Associaon Council will have the power to take binding decisions. > The Associaon Council will be assisted in the performance of its dues by anAssociaon Commiee.The Associaon Commiee will create Subcommiees to implement sector cooperaon. Meeng in a special format, the Associaon Commiee will address the specific DCFTA issues. > The Associaon Agreement also foresees a parliamentary dimension, notably by establishing aParliamentary Associaon Commiee. It will be a forum for Members of the European Parliament and the 4
Parliament of Ukraine to meet and exchange views. > Another important element of the Associaon Agreement is the promoon of regular civil societymeengs. Hence, a dedicatedCivil Society Plaorm willbe established. The Plaorm will be able to makerecommendaons to the Associaon Council. In order to ensure the correct implementaon of the Associaon Agreement, the Agreement texts sets out some general and final provisions. A selecon of these provisions is set out below: > One key provision underpinning the Associaon Agreement sets out the concept ofgradual approximaon of Ukraine’s legislaon to EU norms and standards. Specific melines are set within which Ukraine shouldapproximate its legislaons to the relevant EU legislaon. These melines vary between 2 and 10 years aſter the entry into force of the Agreement. > Another guiding provision sets out the concept ofdynamic approximaon. There was a need to set outthis concept as the EU law and legislaon is not stac but under constant evoluon. Thus the approximaon process will be dynamic and should keep pace with the principal EU reforms, but in a proporonate way, taking account of Ukraine’s capacity to carry out the approximaon. > In order to examine whether the commitments as set out in the Associaon Agreement are met,dedicated provisions related tomonitoringwere included in the Agreement. Monitoring means here to supervisethe applicaon and implementaon of the Associaon Agreement, its objecves and commitments. It is a connuous appraisal of progress in implemenng and enforcing measures and commitments covered bythe Associaon Agreement. This monitoring process will be of a parcular importance for the DCFTA as its posive result will be the prerequisite of any further market opening for the Ukrainian economic operators > Monitoring will include theassessmentsof approximaon of Ukraine’s legislaon to the EU acts (and where applicable internaonal instruments) as defined in the Associaon Agreement. > The Associaon Agreement also sets out aDispute Selement Mechanism. This mechanism would come into effect if obligaons under the Associaon Agreement are not fulfilled by one of the Agreement Pares. For the DCFTA part, another binding trade specific Dispute Selement Mechanism is set out in form of a dedicated protocol. This trade specific mechanism is inspired by tradional WTO dispute selement mechanism. > Theduraon ofthe EU-Ukraine Associaon Agreement is unlimited. At the same me the Pares willundertake a comprehensive review of the achievement of objecves under the Agreement within five years. It should be noted that the text of the AA will be drawn up in 22 EU Member States languages as well as in Ukrainian.