Relations between the EU and Ukraine have not only taken a giant step forward politically since the successful culmination of the Orange Revolution, but equally important, I think, has been the dramatic change in the 'legal' relationship between the EU and Ukraine. On February 21 of this year the EU-Ukraine Cooperation Council signed into law the EU-Ukraine Action Plan, a treaty designed to kick-start the fulfillment of previous goals that have been sitting on ice for more than 10 years since the signing of the Partnership and Cooperation Agreement by the former leaders of Ukraine and the EU, Warsaw Business Journal Online reported.

The Action Plan prioritizes the goals to be achieved by Ukraine in the areas of political, economic and legislative reform. The goals, if implemented, would prepare Ukraine for EU membership, despite the fact that EU leaders have gone out of their way to state that the Action Plan itself is not a ticket to EU membership. In reality, the goals stipulated in the Action Plan closely mirror the criteria that Poland and other new EU member states had to satisfy in order to gain EU admission.

Achievement of these goals provides an opportunity not only for Ukraine, but also for Polish investors. In particular, the Action Plan calls for the eventual creation of a free-trade area between the EU and Ukraine, including the elimination of all export and import restrictions, customs duties and liberalization of the steel sector. Moreover, the Action Plan calls on Ukraine to finally implement privatization on a large scale in a transparent manner, permitting foreign investors to participate in such privatizations on an equal basis with domestic investors. The Action Plan sets as a goal the harmonization of Ukrainian law with that of the EU, including penal, civil and commercial regulations.

Some of the goals set forth in the Action Plan are the very same goals that the EU itself has not been able to achieve. For instance, the Action Plan obligates Ukraine to gradually ensure the free movement of goods, capital and services between itself and the EU. Currently Polish professionals and other service providers (as well as those professionals from other new member states) face restrictions in providing services in most of the original 15 member states, with Ireland and the United Kingdom being two notable exceptions.

With respect to transport and energy, the Action Plan sets forth specific goals, the fulfillment of which provides opportunities to Polish business. Most notably, the European Investment Bank is now tasked with the mandate to help provide financing on infrastructure improvements, including but not limited to the extension of Pan-European transportation corridors into Ukraine and development of the Odessa-Brody-Płock oil pipeline. The Action Plan stresses in particular that the Ukraine-Poland Agreement should be further implemented.

The Action Plan, in its current form, is scheduled to last for three years, following which a review of the progress achieved to date will be assessed by both sides. Depending on the degree of success in achieving the goals of the Action Plan by the end of this period, Ukraine may very well be on its way to being invited to open formal accession negotiations with the EU.

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