The newly proposed EU Association Agreement between the EU and Ukraine is aimed at establishing political association and economic integration. It is expected to replace the 1998 Partnership and Cooperation Agreement as a basis for bilateral relations. However, tough admission standards could keep Ukraine’s trade integration with the European Union on hold. If the process is dragged out long enough, Ukraine may be forced back into the arms of its ex-Soviet ally, Russia.

European Union ministers will meet on November 18 to decide if Kiev has met enough of the criteria to sign the dotted line on its trade association agreement. 

The Ukrainian government approved their draft resolution on September 18 and the agreement will either get a ‘yes’ or ‘no’ at the Eastern Partnership Summit in Lithuania on November 28-29. 

If the EU officials reject Ukraine from their trade association, Kiev will need to reconsider Moscow’s proposal to join the Russia-led Customs Union. Russian President Vladimir Putin has tirelessly tried to convince Ukraine to join Russia, Belarus, Kazakhstan, and other former Soviet nations in a trade bloc that will rival the EU.

Ukraine is facing its most important economic crossroads since the collapse of the Soviet Union. It is caught between two stools – it wants to move towards integration with the west, but doing so is irritating Russia, which imports nearly 25 percent of Ukraine’s export goods.

Russia is Ukraine’s main source of energy, loans, and trade and it wants to dissuade its geographical partner from making what it considers a suicide move towards Europe.  Instead, Russian Prime Minister Putin does not want Ukraine to sacrifice the option of joining Russia’s customs union.

Specifically, Russia has made it clear there will be no ‘bridge’ if Ukraine steps West and they will give up their ‘exclusive relationship’ with Russia.  But if Kiev fails to sign an EU association agreement, Russia could launch a multi-billion dollar joint project with Ukraine aimed at diversifying the country’s economy.

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