Eastern Neighbourhood

48 - Relations with the Eastern Neighbourhood on trade

Grade: A-
Unity 4/5
Resources 5/5
Outcome 7/10
Total 16/20
Scorecard 2012
Grade: B+
Unity 5/5
Resources 4/5
Outcome 6/10
Total 15/20
Scorecard 2010/11
Grade: B+
Unity 5/5
Resources 4/5
Outcome 5/10
Total 14/20

The EU was united on trade issues and continued to make progress towards free-trade areas with Armenia, Georgia, and Moldova. But there was little progress with Ukraine.

Trade liberalisation is one of the key objectives of the ENP and the Eastern Partnership. The EU hopes that trade liberalisation with its neighbours will increase levels of interdependence, help spread prosperity, and modernise the economies of its neighbours, and that it will gradually contribute to consolidating the rule of law and democracy in the region.

In 2012, Europeans made significant progress towards achieving trade liberalisation with three of its eastern neighbours after it launched negotiations on DCFTA with Moldova, Georgia, and Armenia in February. It is expected that talks with at least some of these states could be finalised around the time of the EU–Eastern Partnership summit in Vilnius in November 2013. In the course of 2012, the EU also signed a DCFTA agreement with Ukraine, the EU’s most important economic partner in the Eastern Neighbourhood. But the agreement is not in force yet due to the EU member states’ concerns over the state of democracy and human rights in Ukraine, especially in light of the imprisonment of former prime minister Yulia Tymoshenko (see component 47). However, there was no progress on initiating similar talks with Belarus (which is currently subject to EU sanctions) or Azerbaijan, which expressed no interest in the EU’s free-trade offer.  

The EU was united in pursuing the goal of trade liberalisation, under the leadership of the European Commission. However, it was divided on how to approach Ukraine, and in particular about whether it should sign a DCFTA and the Association Agreement amid concerns about the state of democracy and the rule of law in Ukraine: the Visegrad quartet and the Baltic states argued that ratification of the deal would bind Kyiv closer to the EU but Germany and the UK insisted that the Ukrainian government should first tackle the issues of selective justice and human-rights violations. It remains to be seen whether negotiations with other partners can be completed and a free-trade area between the EU and its eastern neighbours can be established.