You're reading: Envoy: EU-Ukraine free trade pact possible next year

Nov. 18 (Reuters) - Negotiations on a free trade agreement between the European Union and Ukraine could be concluded next year if there is "political will", the bloc's ambassador to Ukraine said on Thursday.

Trade turnover between the EU and the former Soviet nation peaked at $40 billion in 2008 before falling to $22 billion last year due to the global downturn. The two have been discussing a free trade deal since early 2008.

"An EU-Ukraine free trade agreement could be wrapped up in terms of negotiations by next summer if the political will exists," EU Ambassador Jose Manuel Pinto Teixeira told reporters. "We have a positive expectation."

Ukraine’s top trade negotiator told Reuters this month it was too early to talk about a concrete date as a number of issues, mostly in the agricultural sector, had yet to be resolved.

TENSE TALKS

Teixeira said the talks had gained momentum within the past month.

"We are negotiating an agreement but this agreement has some standard requirements that are not negotiable," he said.

Ukraine’s main exports to the EU are agricultural products, energy, chemicals, iron, and steel. EU exports to Ukraine are mostly machinery, transport equipment, chemicals, textiles and clothing, as well as agricultural products.

With a free trade deal that would mean dropping most import duties on both sides, Ukraine hopes to boost sales of its agricultural goods and attract investment into sectors such as pig farming.

On the other hand, it wants to protect its car industry by retaining import duties on European vehicles. Europe, in its turn, protects its own farmers by requirements such as minimum entry prices which would erase Ukraine’s competitive advantages.

Europe also insists on respect for its trademarks such as champagne and cognac — which are treated as generic product names in many ex-Soviet nations.
To reach an agreement, both sides must drop duties on at least 95 percent of traded goods.