Trade Deals: Ukraine Jilts EU, Returns to Russian Fold

When we last talked about Ukraine, it had elected a pro-Russian leader in Viktor Yanukovych--the same Russia-aligned "bad guy" the so-called Orange Revolution supposedly got rid of. Hard economic times (brought on by the global financial crisis) soured the partnership of his opponents Yulia Tymoshenko and Viktor Yushchenko. in their place he offered, well, "change." Ukraine is a rather divided nation with its Eastern Russian-speaking portion favoring closer ties with Russia (and thus Yanukovych) and its Western portion which is warier of the giant neighbor's residual influence post-Soviet Union.

It was thus interesting to note that Yanukovych remained keen on concluding a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU that his ostensibly more Western-leaning predecessors had initiated negotiations on. In recent weeks, the EU had been pressing Ukraine to finally get this FTA done, but it wanted Yulia Tymoshenko released from prison. Jailed over corruption charges, many (especially Europeans) believe she is a political prisoner of the incumbent.

And so things came to a head at the Ukranian legislature. Yanukovych's allies would not let Tymoshenko go for medical treatment in Germany lest she mount a comeback in time for the elections in 2015. Unable to stomach her release, Ukraine has now gone a step further by not only ditching the FTA with the EU but signaling its intentions to revive economic links with Russia:

Ukraine abruptly abandoned a historic new alliance with its western neighbours on Thursday, halting plans for an imminent trade pact with the European Union and saying it would instead revive talks with Russia. EU officials, who had been preparing to sign the long-negotiated deal at the end of next week, said President Viktor Yanukovich cited fears of losing massive trade with Russia when he told an EU envoy this week that he could not agree terms.

Yanukovich's prime minister issued the dramatic order to suspend the process in the interests of "national security" and renew "active dialogue" with Moscow. EU officials, who had hoped the president's complaints in recent days were a last-minute bargaining tactic, saw little chance of saving the deal...

Ukraine's parliament, dominated by Yanukovich's allies, rejected a series of bills earlier on Thursday that would have satisfied the EU by letting opposition leader Yulia Tymoshenko out of prison to travel to Germany for medical treatment [for a back problem]. Shortly afterwards Prime Minister Mykola Azarov issued the order on suspending the EU process and reviving talks with Russia, other members of a Moscow-led customs union and the former Soviet Commonwealth of Independent States.

Is the power of their neighbors such that Ukraine would so feebly accede to Russian pressure? Perhaps it was just Yanukovych playing Russia off with the EU in seeing who would give it more economic concessions. In the end, however, the Russians seemingly offered a better deal--at least to Yanukovych who was always inclined towards Russia to begin with. It was a feint that EU officialdom perhaps bought too eagerly.

However, this story is not yet finished since another Ukranian leader less receptive to its eastern neighbors may yet ink the DCFTA since s/he will have little at stake with regard to releasing Tymoshenko.

Meanwhile, we can pass time figuring out how to get Tymoshenko's famous braided hairstyle...

UPDATE: Yulia Tymoshenko has now declared a hunger strike until her country signs the EU FTA.