Russia’s hard push for Ukraine’s integration into the Customs Union (CU) has reached a watershed moment. During a recent press conference, Russian President Vladimir Putin hinted that Moscow’s sales pitch was complete and noted, “The ball is now in our partner’s court.” In reality, the integration ball is still in the hands of the European Union, which soon has to decide whether to ratify an Association Agreement (AA) and Deep and Comprehensive Free Trade Agreement (DCFTA) with Ukraine during the upcoming Eastern Partnership Summit in November 2013. As the Kremlin made clear, the signing of the AA and the creation of a Free Trade Area (FTA) with the EU will make it impossible for Ukraine to join the CU. However, if Ukrainian President Viktor Yanukovych refuses to make further concessions to the West on the issue of “selective prosecution of the opposition,” the EU may postpone the signing of the AA until after Ukraine’s next presidential election. This will give the Kremlin at least another year to lure Ukraine into its economic alliance. Russian Prime Minister Dmitry Medvedev interpreted Ukraine’s signing of a Memorandum with the Eurasian Economic Commission on May 31 as the “first step” in its accession to the future Eurasian Economic Union.
There are good reasons, however, for the Russian authorities to be more circumspect in promoting Ukraine’s integration into the CU. The political costs of this move might turn out to be much higher for Russia then any symbolic or material gains it can obtain. This memo analyzes the possible political implications of Ukraine’s membership in the CU. It argues that Russia’s strategy to regain regional dominance will be successful only if Ukraine remains outside of its integration arrangements.
PONARS Eurasia Policy Memo No. 257
by Serhiy Kudelia