Rada ratifies agreement on Single Economic Space (04/25/04)

Rada ratifies agreement on Single Economic Space

by Roman Woronowycz
Kyiv Press Bureau

KYIV - The Verkhovna Rada ratified a controversial agreement on a Single Economic Space (SES) with Russia, Kazakstan and Belarus on April 20 amid cries from the national democratic opposition that the country could lose its sovereignty in such a setting.

The ratification, which occurred as a couple of thousand demonstrators of the treaty protested outside the Verkhovna Rada Building, came in tandem with two other international agreements: the border delimitation agreement between Russia and Ukraine, and the treaty on the Azov Sea and the Kerch Strait.

Volodymyr Lytvyn, chairman of the Verkhovna Rada, and his counterparts from Russia, Kazakstan and Belarus had agreed two months ago to present the three agreements together on the same day in their respective Parliaments.

"Today we will surrender the final barricade: sovereignty," warned Yulia Tymoshenko, before the Verkhovna Rada vote during her appeal to the lawmakers not to support the creation of a common market across an extensive portion of the former Soviet Union.

A majority of the Ukrainian lawmakers did not heed her call, inasmuch as 265 voted in support of ratification of the agreement, which was signed by the presidents of the four countries in Yalta on September 19, 2003, as a declaration of intent.

The agreement calls for the establishment of a free trade zone in the region in its first stage, followed by the development of a customs union. Eventually Russia would also like to see a single currency for the SES.

The agreement was hammered out by Russian President Vladimir Putin and President Leonid Kuchma last February and came under harsh criticism by national democratic forces in Ukraine from the time the plan was announced.

The Cabinet of Ministers argued over the agreement's economic benefit to Ukraine just weeks before the summit of the Commonwealth of Independent States - the organization of 12 former Soviet republics headed by Mr. Kuchma - during which the four state leaders were to sign the agreement. Prime Minister Viktor Yanukovych finally received ministerial support to approve the document but only after a proviso was added, stating that Ukraine would only enter the SES to the level allowed by its Constitution.

The Constitution of Ukraine does not allow state leaders to enter into any international arrangements under which the country may be bound by the jurisdiction of a supranational agency, something the SES arrangement suggests in the formation of a customs union. The document ratified by the Verkhovna Rada also precludes entry into any level of economic union that would conflict with the Constitution.

After parliamentary ratification, National Deputy Viktor Pynzenyk, an economist who is a leading member of the Our Ukraine faction - which abstained from the vote, as did the Yulia Tymoshenko faction - said that contrary to the way the accord had been presented to the public, it was an exclusively political document.

"The SES has no relationship to economics, and it will not solve any economic problems, whether those of Russia or Ukraine," Mr. Pynzenyk pointed out.

He explained that Russia had refuted every attempt on the part of Ukraine to establish a free trade zone for the exchange of non-taxable commodities because it was not in Moscow's interest to do so. The lawmaker said that while Russia had every right to look out for its self interest, Ukraine had to be wary that it didn't lose the ability to control its economy, in effect handing that authority over to Moscow, which the treaty on a Single Economic Space could be interpreted as doing.

President Kuchma, however, cast aside any such notions, praising the ratification of the treaty during a conference in Kyiv on economic reform the next day.

"Ukraine was, is and will always be interested in broad cooperation with the CIS. The Verkhovna Rada's ratification of the SES agreement is an important step forward," explained the Ukrainian president.

Mr. Kuchma said that SES integration did not preclude continued movement towards Europe. He said that it actually complemented it and allowed for the Europeanization of Ukraine in a "foursome" with Russia, Belarus and Kazakstan.

"The invigoration of the integration processes among the countries will promote the creation of a zone of sustainable social and political development and a high rate of growth in the eastern part of the European continent," asserted Mr. Kuchma.

The treaty on the SES was signed as part of a package of three bills as had been agreed among Verkhovna Rada Chairman Volodymyr Lytvyn and his counterparts in Russia, Belarus and Kazakstan. The four parliamentary leaders had also agreed to present the three draft bills for approval on the same day, which happened as planned.

The Russian Duma approved the three treaties just after the Ukrainian Parliament did so. The Belarus and Kazakstan Parliaments ratified the SES treaty the next day.

While Ukrainian lawmakers from the center and right roundly supported the land border limitation with Russia (only the Communist faction opposed it, citing no need for a border between the brotherly nations), the same could not be said for the treaty on the Sea of Azov and the Kerch Strait, which passed with 274 ayes and 59 nays. After failing to obtain a sufficient number of votes to pass a resolution on the admissibility of ratifying the agreement, the Our Ukraine, Tymoshenko and Socialist factions did not take part in the ratification vote.

The treaty, which was developed by Presidents Putin and Kuchma late last year after the uproar surrounding a Russian attempt to build a dike from the Taman Peninsula to the Ukrainian island of Tuzla had died down, basically left the maritime border between the two countries as it was: in joint hands.

National democratic forces criticized the treaty for giving Russia the ability to control the ingress of international shipping into the Kerch Strait.

They also noted that while President Kuchma had staunchly defended Tuzla Island as the so-called "dam" to the island was being built, even ordering armed border guards to defend tiny outpost in the Kerch Strait, the island's ownership remains an open question within the treaty.

The agreement also fails to determine how mineral and fishing rights are to be divided, much of them found on the Ukrainian side of the Azov Sea.

| Home Page |