Deep and Comprehensive Free Trade Area

Pro-EU demonstration in Kyiv, November 27, 2013, during Euromaidan

While work on signing a deep and comprehensive free trade agreement between Ukraine and the EU first began in 1999,[4] formal negotiations between the Ukrainian government and the EU Trade Commissioner were not launched until 18 February 2008.[5] As of May 2011 there remained three outstanding issues to be resolved in the free trade deal: quotas on Ukrainian grain exports, access to the EU's services market and geographical names of Ukrainian commodities. Aside from these issues, the deal was ready.[6] Despite those outstanding issues, Ukraine was ready to sign the agreement as it stood. Although it wanted stronger wording on enlargement prospects and access to the EU market for its truckers, Ukraine had more than many other candidates at the equivalent stage of the process. The finalised agreement was initialed on 19 July 2012.[7] Ratification of the DCFTA, like the AA, has been stalled by the EU over concerns over the rule of law in Ukraine.[8][9][10] This includes the application of selective justice, as well as amending electoral laws. As a result, the role of Ukrainian oligarchs in sanctioning the agreement was also questioned.[11]

If Ukraine would choose the agreement, the Eurasian Economic Commission's Customs Union of Belarus, Kazakhstan and Russia would withdraw from free trade agreements with the country, according to Russian presidential advisor Sergei Glazyev.[12] However, on 21 November 2013 a Ukrainian government decree suspended preparations for signing the agreement that was scheduled to be signed during a 28–29 November 2013 EU summit in Vilnius, and it was not signed.[lower-alpha 1][lower-alpha 2][18][19][20][21][22][23][24][25][26] The decision to put off signing the association agreement led to the 2014 Ukrainian revolution, called Euromaidan.[27][28]

During the Eastern Partnership summit in Riga on 22 May 2015, the EU and its partners declared that the 'provisional application' of the DCFTA will start on 1 January 2016.[29] However, the Riga Declaration also stated that "constructive efforts in the trilateral consultations on EU-Ukraine DCFTA implementation (...) are important", which Anders Åslund, Senior Fellow of the Atlantic Council, interpreted as meaning Russia (that has been militarily intervening in Ukraine ever since the February 2014 Revolution) would have to give consent first.[30]

According to the EaP Civil Society Forum, the EU plans, in 2017–2020 to shift the focus of its assistance for 2017–20 to the implementation of the DCFTA to ensure legislation and parameters align with EU standards.[31]

The EU-Ukraine DCFTA provisionally entered into force on 1 January 2016.[32] According to European Commission, "The DCFTA will offer Ukraine a framework for modernising its trade relations and for economic development by the opening of markets via the progressive removal of customs tariffs and quotas, and by an extensive harmonisation of laws, norms and regulations in various trade-related sectors, creating the conditions for aligning key sectors of the Ukrainian economy to EU standards."[1] "Unlike classical FTAs, it provides for both the freedom of establishment in services and non-services sectors, subject to limited reservations, and the expansion of the internal market for a set of key services sectors once Ukraine effectively implements the EU-acquis."[1] Furthermore, Ukraine is "granted access to the EU internal market for the sectors concerned", which results in "an unprecedented level of integration".[1]

In addition to Georgia, Moldova and Ukraine, Armenia was also set to sign an Association Agreement with the EU, however, Armenia suddenly broke off negotiations in 2013 to pursue membership in the Eurasian Economic Union.[33] Following a period of brief uncertainty between the EU and Armenian government, bilateral negotiations resumed on restructuring the relationship between Armenia and the EU.[34] After extensive negotiations, Armenia and the EU finalized the Comprehensive and Enhanced Partnership Agreement (CEPA) in November 2017, deepening political and economic ties between them.[35] The new Comprehensive and Enhanced Partnership Agreement can be seen as a “lite” version of the DCFTA, in which 96% of Armenian goods may enter the EU's single market with zero tariffs. As of 2019, the EU is Armenia's biggest export market.[36] There are several political parties in Armenia which are opposed to Armenia's current membership in the Eurasian Economic Union. Bright Armenia, the Free Democrats and the European Party of Armenia for example, support Armenia's withdrawal from the Eurasian Economic Union and wish to begin renegotiating an Association Agreement including a DCFTA between the EU and Armenia.[37]