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EUROPEAN INTEGRATION
Ukraine - EU bilateral relations:

Relations between Ukraine and the European Union were established in
December 1991, when the Minister for Foreign Affairs of the Netherlands as
the EU Presidency, on behalf of the Union officially recognized the
independence of Ukraine.

The Partnership and Cooperation Agreement between Ukraine and the EU
(PCA) signed on 16 June 1994 (entered into force on 1 March 1998)
constitutes the legal base of the EU-Ukraine relations and establishes
cooperation on a wide range of political, trade, economic and humanitarian
issues.

At present there are 7 priorities of the EU-Ukraine cooperation envisaged by
the PCA's framework: energy, trade and investments, justice and home affairs,
adaptation of the Ukrainian legislation to that of the EU, environment, transport,
trans-border cooperation, collaboration in the sphere of science, technology
and outer space.

The EU-Ukraine dialogue is carried out through annual meetings of the
EU-Ukraine Summit with the participation of the President of Ukraine;
Cooperation Council with the participation of the Prime-Minister of Ukraine;
Cooperation Committee; Committee on parliamentary cooperation; regular
Ukraine-EU Triyka meetings; permanent expert consultations. The EU and
Ukraine annually hold more that 80 different official meetings and consultations
at the high and expert levels.

The European integration is a key and irreversible priority of Ukraine's foreign
policy. In the address to the Verkhovna Rada of Ukraine in June 2002 the
President of Ukraine outlined the European integration as a streamline of
Ukraine's economic and social strategy for the next decade.

Present development of the political dialogue between Ukraine and the EU is
based on implementation by Ukraine of the Strategy of integration into the EU,
implementation of the PCA and elaboration of the Action Plan in the framework
of the European Neighborhood Policy. Ukraine is proceeding form the fact that
the implementation of this document should contribute to strengthening
cooperation with the EU in the light of enlargement, create necessary
preconditions for raising its relations with the Union to a qualitatively new level.
Proper implementation of the Action Plan should also facilitate gradual
integration of Ukraine into the EU Single Market and create prerequisites for
establishing Free Trade Area with the EU. The conclusion of a new enhanced
agreement with the EU should become the ultimate political goal of the Action
Plan.

Remaining outside the EU borders, Ukraine has successfully associated with
the realization of the EU Common Security and Defense Policy (ESDP). Our
state takes part in the EU Police Missions in Bosnia and Herzegovina and the
Former Yugoslav Republic of Macedonia. The expected conclusion of an
Agreement on the security procedures for exchange of classified information
and of an Agreement establishing a framework for Ukraine's participation in the
EU crisis management operations, should contribute to strengthening legal
base of cooperation in this sphere.

The EU also recognizes an important role of Ukraine in providing security and
stability on the continent as well as its vast industrial and technological
potential in the military sphere. The practice of inviting Ukraine to military
training with the participation of the EU units is a clear confirmation of that.

The EU-Ukraine trade and economic cooperation has recently experienced
notable intensification. From year to year the bilateral foreign trade turnover
and direct EU investment in the Ukrainian economy are constantly increasing.
Today the EU is the largest foreign trade partner of Ukraine (the share of the
EU in the foreign trade of Ukraine reached 33% upon the accession to the
Union of new ten Members-States). In June 2004 the Parties initialed the
Agreement on trade in steel products, whose signature is scheduled for the fall
this year. According to the Agreement, Ukraine's quota on steel for the year
2004 is amounted to 606 thousand tons. The EU consideration of the
correspondence of the Ukrainian economy to the market standards within the
framework of the EU antidumping procedures is almost completed.

Ukraine and the EU actively cooperate in the framework of the Working Party
on Ukraine's accession to the WTO. The EU side supports Ukraine in
multilateral as well as bilateral negotiations within the WTO on the permanent
basis. After the conclusion in 2003 of the bilateral Protocol on the access to
the markets of goods and services within the framework of the WTO, the
parties started elaboration and adjustment of the draft Report of the Working
Party.

The EU-Ukraine cooperation in the sphere of justice and home affairs, in
particular on the issues of granting asylum, border management, fight against
money laundering and illegal drug trafficking is consistently strengthening.

In the context of the EU enlargement Ukraine strives to prevent the creation of
a new dividing lines in Europe and advocates non-discriminatory approach to
the regime of movement of its citizens across the territory of the EU Member
States. The work in this direction in particular includes: perspective introduction
of long-term multiply visas for the citizens of Ukraine who take part in economic,
cultural and sports exchanges with the EU on a permanent basis; simplification
of visa regime for citizens of Ukraine - border areas inhabitants and in the
long-term prospect - facilitation of visa regime for all categories of the
Ukrainians.

Ukraine and the EU proceed with dynamic cooperation in the sphere of energy,
including the nuclear one, agriculture and environment. The EU political and
financial assistance to Ukraine in addressing the most urgent problems in the
energy sector as well as in mitigating the consequences of the Chornobyl
catastrophe is gradually increasing.

The EU has also provided support for reforming the control system of the
Ukrainian gas-transporting system, holding technical audit of the oil terminal
"Pivdennyi" and technical and economic assessment of the project of
transportation of the Caspian oil by Odesa-Brody-Gdansk pipeline,
development of the alternative energy and modernization of the coal industry
etc.

The EU is the largest donor to Ukraine. Total assistance since 1991 in the
framework of the TACIS program, macro financial and humanitarian assistance
amounted to more that 1 billion euro.

The EU-Ukraine cooperation in the sphere of outer space is also very
promising. Given Ukraine's place among 8 countries demonstrating significant
technological background on space programmes, on 2 September 2004 the
European Commission sought Council approval for its recommendation to start
negotiations on a cooperation agreement with Ukraine on the development of a
Civil Global Navigation Satellite System (GNSS). The cooperation is expected
to cover research and scientific activities especially on standardisation issues,
regional integrity monitoring and financial investment in GALILEO.

Today Ukraine sees its main task in consolidation of the European values and
standards in political, economy and social spheres, regarding it as a pledge of
its public stability and sustainable development.
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