ANALYSIS: President Kuchma signs CIS accord on single economic zone with 'reservations' (10/19/03)

ANALYSIS

President Kuchma signs CIS accord on single economic zone with 'reservations'

by Jan Maksymiuk
RFE/RL Poland, Belarus and Ukraine Report

The presidents of Russia, Ukraine, Belarus and Kazakstan - Vladimir Putin, Leonid Kuchma, Alyaksandr Lukashenka, and Nursultan Nazarbaev, respectively - on September 19 in Yalta signed an accord on the creation of a single economic zone of the four states. The accord, which seems to spearhead the declared creation of a free-trade zone on the entire Commonwealth of Independent States (CIS) territory, commits its signatories to synchronizing their legislation on tariffs, customs and transport to make possible the free movement of commodities, labor, and capital.

"What is the purpose of the documents that we signed today? First of all, these documents cover exclusively the area of economic cooperation," Mr. Putin said on September 19. "They are aimed at reducing the burden of the [current] infrastructure on the production, transportation, and sale of industrial and agricultural products. In the end, if we work consistently, this should and will help increase the competitiveness of our products on the world market."

"The signing of the agreement on a common economic space in no way destroys the CIS, as some believe," Mr. Nazarbaev commented. "On the contrary, having adopted all the necessary documents, these countries could show other [CIS] countries an example of integration."

Mr. Lukashenka made a little show of skepticism, if not distaste, while signing the above-mentioned accord and an accompanying concept of the creation of a single economic zone. After the documents were signed by Messrs. Nazarbaev, Putin and Kuchma, Mr. Lukashenka took them and began to leaf through them, as if unsure whether to sign them. Only after Mr. Kuchma asked him "Why do you criticize everybody, both at closed and open sessions?" did Lukashenka put his signature under them. But he remained fairly skeptical about their implementation. "Belarus will make real steps only if all the states fulfill all the provisions of the agreement and the concept," Lukashenka said during a news conference. "If Russia, Ukraine and Kazakstan make real steps forward, then we will keep step with them."

"When I was signing this document today, I had absolutely no doubt - not for a single moment - that it served the national interests of Ukraine," Mr. Kuchma commented. "Under the present conditions, when the European markets are closed for us ... it's better to have a real bird in the hand than two in the bush."

But Mr. Kuchma reportedly signed the documents with reservations, saying Ukraine will commit itself only to those provisions that do not contradict its constitution. Earlier the Verkhovna Rada had voted 291-13 to adopt a resolution supporting the accord on the single economic zone provided that it does not contradict the Constitution of Ukraine, laws, or international commitments. A similar stance was taken by Prime Minister Viktor Yanukovych's Cabinet of Ministers.

Kyiv's apprehensions were caused by the accord's provision stipulating the creation of a supranational regulatory body in this union of four, to which the signatories are expected to transfer part of their sovereign decision-making powers.

The accord also stipulates that all decisions in this regulatory body are to be made by "weighted vote" - the number of votes assigned for each signatory is to be dependent on its economic potential. Even under the most optimistic estimates by Ukrainian analysts and commentators, Russia is entitled to no less than 60 percent of votes in this union, so, in fact, all decisions in the single economic area will be dictated by the Kremlin.

The debate in Ukraine on the single economic zone of Russia, Ukraine, Belarus and Kazakstan before September 19 was heated and divisive. The Our Ukraine coalition and the Yuliya Tymoshenko Bloc firmly opposed the signing of the accord by President Kuchma, saying it contradicts and hampers Ukraine's declared integration with Euro-Atlantic structures in general and the World Trade Organization in particular. On the other hand, the Communist Party and the Socialist Party were basically in favor of Ukraine's closer integration with the CIS. The same can be largely said by the pro-presidential forces in the Verkhovna Rada.

However, it should be noted that three ministers - Foreign Affairs Minister Kostyantyn Gryshchenko, Minister of the Economy Valerii Khoroshkovskyi and Justice Minister Oleksandr Lavrynovych - advised Mr. Kuchma against signing the document on the single economic zone and spoke against it in Parliament. It seemed to be the first case of such major "insubordination" of ministers during President Kuchma's entire tenure.

In a much bolder step of disobedience, Ukraine's Ambassador to Romania Anton Buteiko resigned to protest the signing of the accord on the single economic zone by Mr. Kuchma.

Will the Ukrainian Parliament ratify the accord? It seems that pro-presidential lawmakers (even if not all) together with the Communist Party caucus in the Verkhovna Rada will be able to muster the 226 votes required for ratification.

Will Ukraine lose part of its sovereignty due to such a development? Hardly so. First, there is Mr. Kuchma's "reservation" that Ukraine will follow only those provisions of the accord that do not contradict its constitution. It is a leeway that will allow Kyiv to maneuver in this union of four and seek primarily economic benefits of integration without surrendering political sovereignty.

Second, it is not quite clear whether Moscow - which still has the most important say in the CIS area - actually intends to pursue the integration according to the scenario laid out in the accord signed in Yalta on September 19. Some commentators point out that the accord was prepared hastily, without necessary economic calculations and analyses, and is to serve primarily as a sign of Mr. Putin's success in reintegrating the post-Soviet area ahead of the two important campaigns in Russia: parliamentary elections in December and presidential elections in March. If so, then the accord may slowly sink into oblivion, as did a multitude of others in the 12-year-old history of the CIS.

On the other hand, it is very likely that the problem of the CIS single economic zone will be added to Ukraine's hot political agenda, along with the planned constitutional-system reform and the question of whether President Kuchma wants to remain in power beyond 2004.

Interfax reported that parties constituting the Our Ukraine bloc have begun collecting signatures under an open letter to President Kuchma. "Your participation in the creation of a so-called single economic area under the conditions contradicting the current constitution, legislation and international commitments of Ukraine ... is provoking the indignation of Ukrainian citizens," the letter reportedly reads. "Since you have signed this accord despite arguments to the contrary, we demand that the Verkhovna Rada launch the procedure of your impeachment for the betrayal of national interests of Ukraine."

The Verkhovna Rada will hardly heed to this postulate. But legislators will have an exciting topic on which to practice their eloquence.

Jan Maksymiuk is the Belarus, Ukraine and Poland specialist on the staff of RFE/RL Newsline.

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