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Ukraine's Choice: European Association Agreement or Eurasian Union?


  • Anders Aslund

    () (Peterson Institute for International Economics)


Ukraine's intention to sign the European Association Agreement at the Vilnius summit in late November 2013 has raised a furor in the Kremlin, which wants it to join the Customs Union instead. In retaliation, Russia has imposed trade sanctions against Ukraine in clear violation of its obligations in the World Trade Organization (WTO). Åslund argues that Europe, Ukraine, and Russia all share the blame for creating the current impasse and must alter their policies to resolve the conflict. Ukraine should improve its macroeconomic policies to reduce its vulnerability and also comply with all EU demands, including releasing Yulia Tymoshenko. The European Union should support Ukraine but also make sure that Ukraine meets its conditions so that both parties can sign the agreement in November. The Association Agreement will bring substantial gains to Ukraine, whereas the Customs Union is smaller, less competitive, and does not offer Ukraine any significant benefits. Russia should realize that it is not in its national interest to force countries to join its Customs Union. It should obey the rules of the WTO and the Commonwealth of Independent States Free Trade Agreement and end its trade sanctions against Ukraine. The United States and the European Union should defend Ukraine against Russian economic aggression in the WTO and through vocal and economic support.

Suggested Citation

  • Anders Aslund, 2013. "Ukraine's Choice: European Association Agreement or Eurasian Union?," Policy Briefs PB13-22, Peterson Institute for International Economics.
  • Handle: RePEc:iie:pbrief:pb13-22

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    References listed on IDEAS

    1. Shepotylo, Oleksandr, 2010. "A Gravity Model of Net Benefits of EU Membership : The Case of Ukraine," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 676-702.
    2. Maryla Maliszewska & Irina Orlova & Svitlana Taran, 2009. "Deep Integration with the EU and its Likely Impact on Selected ENP Countries and Russia," CASE Network Reports 0088, CASE-Center for Social and Economic Research.
    3. Marek Dabrowski & Svitlana Taran, 2012. "The Free Trade Agreement between the EU and Ukraine: Conceptual Background, Economic Context and Potential Impact," CASE Network Studies and Analyses 437, CASE-Center for Social and Economic Research.
    4. Carneiro, Fracisco, 2013. "What Promises Does the Eurasian Customs Union Hold for the Future?," World Bank - Economic Premise, The World Bank, issue 108, pages 1-5, February.
    5. von Cramon-Taubadel, Stephan & Hess, Sebastian & Brummer, Bernhard, 2010. "A preliminary analysis of the impact of a Ukraine-EU free trade agreement on agriculture," Policy Research Working Paper Series 5264, The World Bank.
    6. Marek Dabrowski & Svitlana Taran, 2012. "Is Free Trade with the EU Good for Ukraine?," CASE Network E-briefs 06, CASE-Center for Social and Economic Research.
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