A4-0094/94

Resolution on economic and trade relations between the European Union and Ukraine

The European Parliament,

- having regard to its resolution of 9 July 1992 on economic cooperation between the European Community and the Commonwealth of Independent States ((OJ C 241, 21.9.1992, p. 161. )),

- having regard to its resolutions of 12 March 1993 on future agreements between the Community and the New Independent States of the former Soviet Union ((OJ C 115, 26.4.1993, p. 248. )) and of 21 April 1994 on the situation in Ukraine ((OJ C 128, 9.5.1994, p. 309.)),

- having regard to the agreement on partnership and cooperation negotiated between the European Union and Ukraine and the interim agreement under which the trade provisions of the partnership agreement between the European Union and Ukraine are scheduled to enter into force beforehand,

- having regard to its resolution of 27 October 1995 on the conclusion of an EU-Ukraine interim agreement ((Minutes of that Sitting, Part II, Item 3.)),

- having regard to its assent of 30 November 1995 to the conclusion of the Agreement on partnership and cooperation between the European Communities and their Member States, of the one part, and Ukraine, of the other part (94/0136(AVC)) ((Item 1(a) of these Minutes.)),

- having regard to Rule 148 of its Rules of Procedure,

- having regard to the report of the Committee on External Economic Relations (A4-0094/94),

A. whereas economic and trade relations with Ukraine are still based on the trade and cooperation agreement concluded in 1989 between the European Community and the former USSR,

B. whereas, following the collapse of the USSR, Ukraine as an independent state controls part of the nuclear potential of the former USSR,

C. whereas the Ukrainian Parliament has approved Ukraine's accession to the Non-Proliferation Treaty (NPT); having regard to the planned closure of the Chernobyl nuclear power station,

D. whereas Ukraine has so far hardly begun to make adequate efforts to turn its economic system into a free and social market economy,

E. having regard to the encouraging inaugural speech by Mr Kutchma, the newly- elected President of Ukraine, in which he set out plans for comprehensive political and economic reforms,

F. having regard to the technical and financial aid granted to Ukraine by the European Union and its Member States and the other western industrialized nations,

1. Welcomes the conclusion of the Partnership and Cooperation Agreement and its ratification by Ukraine on 10 November 1994 and calls on the Member States to ratify this agreement forthwith so that the wide-ranging cooperation provided for in the agreement can begin as soon as possible;

2. Notes that the partnership agreement is more than a mere trade and cooperation agreement since by establishing a political dialogue and cooperation in the fields of internal security, it covers all areas of Union policy, as redefined in the Treaty on European Union;

3. Stresses that respect for democratic principles and human rights is not only the basis for mutual cooperation but is also an essential precondition for the success of market economy reforms;

4. Welcomes the constitutional agreement reached on 8 June 1995 between President Kutchma and the Ukrainian Parliament on their respective areas of competence, which will help to create an internal political climate conducive to the implementation of economic and political reforms;

5. Is concerned at the present economic situation in Ukraine which is characterized by an even sharper decline in productivity and greater imbalances in the economy as a whole than the other CIS Republics;

6. Attributes these developments primarily to the excessive budgetary deficit of Ukraine and the fact that central bank loans are used to fill this deficit;

7. Points out that, in order to overcome this economic crisis, a national consensus is necessary to allow the burden of adjustment to be divided equally among all sectors of the population;

8. Welcomes the agreement concluded between Ukraine and the International Monetary Fund (IMF) on the granting of $ 371 million to help the balance of payments as part of the Systemic Transformation Facility, under which Ukraine has pledged, on the basis of respect for democracy and human rights, energetically to endeavour to stabilize the economy as a whole by reducing its macroeconomic imbalances;

9. Is aware that, given the macroeconomic conditions, a lending commitment by the EU is risky, but nevertheless calls on the Council to make available to Ukraine forthwith the two medium-term aid payments of ECU 85 m and ECU 200 m in accordance with the conditions set out in the basic regulations since, without these contributions and those to be made by other donor states and international financial institutions, Ukraine would be unable to stabilize its balance of payments; is nevertheless concerned about the internal political problems in Ukraine affecting the ratification of the agreement on the first medium-term aid payment;

10. Calls on the Commission to forward this proposal to it immediately, so it can deliver an opinion on it;

11. Welcomes the fact that the partnership agreement provides for closer economic cooperation between Ukraine and the other CIS Republics, as part of which traditional supply networks in the field of energy and raw materials and agricultural products could be reactivated;

12. Draws attention to the problems Ukraine still has to contend with in repairing the damage caused by the Chernobyl nuclear disaster and ensuring energy supplies;

13. Welcomes the decisions taken by the European Union and the other industrialized nations concerning aid to Ukraine aid to tackle these problems;

14. Draws attention to the importance of the agricultural market for Ukraine which is a major agricultural producer; calls, therefore, on the Commission to consider to what extent it can help Ukraine by granting it additional trade concessions in the agricultural sector as part of the partnership agreement, while ensuring that this does not disrupt Union agriculture;

15. Hopes that the forthcoming and current negotiations on specific additional agreements concerning trade in textiles and steel products will soon be brought to a successful conclusion and that trade in nuclear materials can also be governed by an agreement of this kind;

16. Calls on the European Union and the Member States to increase cooperation in the areas of research, development, technology transfer and industry and in the cultural sphere;

17. Highlights the importance of the approximation of legislation agreed on in the partnership agreement and the commitments undertaken in the field of competition law, the protection of intellectual property and public subsidies which are designed to establish an equitable basis for the reciprocal exchange of goods;

18. Considers that until these provisions are fully implemented the European Union must be able to resort to trade protection measures in cases where the market is being disrupted, for example by dumped or subsidized imports from Ukraine, although this facility must not be misused for protectionist purposes;

19. Is aware that, if Ukraine joins the WTO, the partnership agreement provisions on the traffic in goods, cross-border service transactions and the conditions of establishment will have to be revised and, if this occurs, looks to the Ukrainian side to improve market access and working and establishment conditions for EU undertakings;

20. Notes with satisfaction that Ukraine has refrained from issuing rules on establishment which would discriminate against maritime transport undertakings from the EU and be contrary to the provisions of the partnership agreement; regrets, however, that negotiations with a view to regulating transport by inland waterways are due to begin immediately after the agreement has come into force;

21. Instructs its President to forward this resolution to the Council, the Commission, and the governments of the Member States and Ukraine.