Relations between Ukraine and the European Union (EU) are currently shaped via the European Neighbourhood Policy (ENP), a foreign policy instrument of the EU designed for the countries it borders. The European Union (EU) is seeking an increasingly close relationship with Ukraine, going beyond cooperation, to gradual economic integration and deepening of political cooperation. Ukraine is said to be a priority partner within the European Neighborhood Policy (ENP). Partnership and Cooperation Agreement.
The political dialogue between the EU and Ukraine started in 1994 when the Partnership and Cooperation Agreement (PCA) was signed. That document was focused on economic and social issues as well as on the necessity of improving public government and guaranteeing free press and civil rights. The framework set for political discussions was modest: yearly meeting between EU Troika and Ukrainian leadership and some inter ministerial consultations. The Partnership and Cooperation agreement of 1994 entered into force in 1998 and expired in 2008.
None of top level meetings brought major changes to a reserved EU approach. Leaders focused chiefly on economic transition and human rights records as well as on issues connected to the Chernobyl nuclear power plant and its containment. European Neighbouhood Policy (ENP) Negotiations on a deep and comprehensive free trade agreement between Ukraine and the European Union started on 18 February 2008 between the Ukrainian government and the EU Trade Commissioner.
Energy Charter Treaty and Energy Community Both Ukraine and all EU member states are signatories of the Energy Charter Treaty (ECT), a legally-binding treaty negotiated following the 1991 Energy Charter' political declaration of principles for international energy including trade, transit and investment. The ECT was signed in December 1994 and came into effect in April 1998. Ukraine and all EU member states are also signatories of the 1998 Trade Amendment reflecting the change from the GATT to the WTO.
Economic relations During the 1990s, Germany, the Netherlands and Italy remained major trading partners of Ukraine. According to Eurostat, between 2000 and 2007 EU trade in goods with Ukraine more than tripled in value: exports rose from 5. 5 bn Euro to 22. 4 bn, while imports increased from 4. 8 bn Euro to 12. 4 bn. Nevertheless, this increase didn't make Ukraine one of the EU's major trading partners.
In 2007, Ukraine accounted for only 2% of EU exports and a mere 1% of European Union imports which is toward the bottom of the EU's top 20 trading partners (16th). According to the European commission paper, trade with Ukraine is dominated by manufactured goods. Nearly half of the EU exports to Ukraine in 2007 were machinery and vehicles and a further quarter were other manufactured articles. A quite similar structure can be seen in imports: unspecified manufactured articles accounted for two fifths followed by a crude metal for a further fifth.
At the more detailed level, the main EU exports to Ukraine in 2007 were medicine, motor vehicles and mobile phones, while the main imports were iron and steel products, as well as sunflower seed oil, ferro-nickel, iron ores and oil. Among the EU27 Members States, Germany (5. 9 bn Euro or 26% of EU exports) was the largest exporter, followed by Poland (4. 1 bn or 18%). Italy (2. 4 bn or 19%) was the largest importer followed by Bulgaria (1. 6 bn or 13%) and Germany (1. 3 bn or 11%).
The largest surpluses in trade with Ukraine in 2007 were observed in Germany (+ 4. 6 bn Euro) and Poland (+2. 8 bn Euro) while Bulgaria scored the highest deficit ( -1. 4 bn Euro) Source: European Commission/Eurostat paper issued before September 9 EU-Ukraine summit in Paris. Since its signature in 2005, Ukraine is member of the Energy Community (also referred as European Energy Community), a community established between the European Union (EU) and a number of third countries in order to extend the EU internal energy market to South East Europe and beyond.
The Treaty establishing the Energy Community was signed in Athens, Greece, on 25 October 2005, and entered into force on 1 July 2006. Ratification by Ukraine took time and finally followed on 15 December 2010. EU Financial Assistance to Ukraine For the 2000–2006 budgetary period, the financial assistance of the EU to Ukraine was framed in the TACIS programme, established in 1991, a programme of technical assistance that supports the process of transition to market economies for the 11 CIS countries and Georgia.
For the 2007-2013 budgetary period, ENPI, standing for "European Neighbourhood and Partnership Instrument", covers the ENP countries, and replacing the TACIS funds for Ukraine. Ukraine is moreover eligible for horizontal instruments, that cover countries regardless of their region, such as: – the Instrument for Stability, a new instrument to tackle crises and instability in third countries and address trans-border challenges including nuclear safety and non-proliferation, the fight against trafficking, organised crime and terrorism; – the Macro Financial Assistance.