Kuchma and Putin meet in Yalta to discuss Single Economic Space (05/02/04)

Kuchma and Putin meet in Yalta to discuss Single Economic Space

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Two days after the Ukrainian and Russian Parliaments ratified a treaty on a common market that will unite their economies and those of Kazakstan and Belarus, President Leonid Kuchma of Ukraine and his Russian counterpart, Vladimir Putin, met outside of Yalta on Ukraine's Crimean Peninsula to discuss the new economic alignment they had conceived and developed.

The common market, known as the Single Economic Space (SES), is the brainchild of the two presidents, introduced by them in February several months after Mr. Kuchma had taken over as head of the Commonwealth of Independent States (CIS) from Mr. Putin.

After the treaty was ratified by the Russian State Duma and the Ukrainian Verkhovna Rada on April 20 and the Belarusian and Kazak Parliaments in the following days, the four countries are expected to lay the groundwork for a free trade zone within their territories, which Russia has said it hopes will eventually lead to a customs union soon after and a single currency several years down the road.

Presidents Putin and Kuchma exchanged the instruments of ratification for the SES treaty on April 23 at the Livadia Palace in Yalta before the beginning of an inter-parliamentary conference between Duma and Verkhovna Rada lawmakers titled, "Ukraine and Russia: The Strategic Partnership."

President Kuchma called the exchange of ratification documents "the most important event in the modern history of relations between Ukraine and Russia."

"These are not simply relations within the framework of economic cooperation," noted Mr. Kuchma. "We see this as a matter of common, fundamental research and a common policy in the area of science, engineering and technology."

The Ukrainian state leader called for bilateral cooperation in the development of high technology, while Mr. Putin stated the need to avoid losing "the ground our countries had gained during Soviet times," according to Interfax-Ukraine.

The two state leaders also reflected on two border treaties signed in conjunction with the SES treaty. Mr. Putin said he was very satisfied that the two sides had resolved the problems of the Ukrainian-Russian border, including the territorial division of the Sea of Azov and the Kerch Strait.

"I would like to note that our specialists in the governments and the parliaments of both countries found a balanced and mutually advantageous resolution regarding use of the Sea of Azov and the Kerch Strait," Mr. Putin stated.

The new treaty on the maritime border leaves the Azov Sea under mutual control of both countries and assigns the right of refusal for entry of foreign vessels to either one, pretty much as it had been until now. Ukraine had resolutely resisted such a treaty for years, instead trying to get Russia to agree to a division of the maritime bodies from the surface to the bottom in order to protect mineral and fishing rights.

Addressing the most vexing issue for those in the Ukrainian Parliament who vigorously sought to derail the ratification process, Russian lawmakers tried to assure the oppositionist flank of the Verkhovna Rada that Russia would be an equal and fair partner in the SES. According to Interfax-Ukraine, Russian State Duma lawmaker Nikolai Gapochka of the People's Choice Party asserted during the inter-parliamentary discussions that, while Russia would have the most votes in the regulatory body that would oversee the work of the SES, the body itself would be limited to a consultative role.

The SES agreement held that the weight of the vote within the regulatory body establishing customs and trade conditions within the SES would be divided according to the current gross domestic product of each of the four member countries, which gives Russia 40 percent, Ukraine 30 percent, Kazakstan 20 percent and Belarus 10 percent of the voting weight in the regulatory body.

The Russian and Ukrainian presidents agreed that the four state leaders of the parties to the SES agreement should meet in Kyiv next month.

Mr. Kuchma, speaking during a regular monthly press conference in Kyiv on April 28, reasserted that Ukraine was not inclined to go any further than a free trade zone in its involvement with the SES.

"Our first question when we meet in May is going to be how we are going to move forward," explained Mr. Kuchma. "If we are truly interested in the future of the SES, then we must first agree on a free trade zone. If we start nit-picking and seeking advantage in the details, then this will go nowhere fast."

Mr. Kuchma also took another political swipe at the European Union, expressing his frustration over the lack of follow-up on promises which he said had been the hallmark of Ukraine-EU relations. The Ukrainian president said that the EU had too often voiced promises of support for Ukraine, only to follow through with more requests and requirements but no action. He called it unacceptable that Ukraine had not yet received recognition of "market economy status" from the EU, which was promised two years ago.

President Kuchma compared the EU to a seasoned toreador expertly using his red cape to lure Ukraine forward and the country to a young bull that kept charging towards the cape only to have it swiped away time and time again.

Nonetheless, the Ukrainian president said Ukraine would continue on a strategic track into Euro-Atlantic structures and into the EU. He added that he didn't foresee EU membership for Ukraine for another 20 to 30 years.

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