Deep and Comprehensive Free Trade Area

DCFTA states with access to the EU's internal market in selected sectors: Georgia, Moldova, Ukraine

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The Deep and Comprehensive Free Trade Areas (DCFTA) are three free trade areas established between the European Union, and Georgia, Moldova and Ukraine respectively. The DCFTAs are part of each country's EU Association Agreement. They allow Georgia, Moldova and Ukraine access to the EU's internal market in selected sectors and grant EU investors in those sectors the same regulatory environment in the associated country as in the EU.^[1] The agreements with Moldova and Georgia have been ratified and will officially enter into force in July 2016, although parts of them are already provisionally applied. The agreement with Ukraine is provisionally applied but has not been ratified by the European Union, Euratom and the Netherlands.

EU-Ukraine DCFTA

Background

Pro-EU demonstration in Kiev, 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,^[2] formal negotiations between the Ukrainian government and the EU Trade Commissioner were not launched until 18 February 2008.^[3] 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.^[4] 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.^[5] Ratification of the DCFTA, like the AA, has been stalled by the EU over concerns over the rule of law in Ukraine.^[6][7][8] 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.^[9]

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.^[10] 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][16][17][18][19][20][21][22][23][24]} The decision to put off signing the association agreement led to 2014 Ukrainian revolution.^[25][26]

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.^[27] 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.^[28]

Effects

The EU-Ukraine DCFTA provisionally entered into force on January 1, 2016.^[29] 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]

Planned DCFTAs

In 2015, Commissioner Malmström mentioned a plan to start negotiations of a DCFTA with Morocco and Tunisia.^[30]

Implementation timeline

• Georgia–European Union Association Agreement: September 1, 2014^[31]
• Moldova–European Union Association Agreement: September 1, 2014^[32]
• Ukraine–European Union Association Agreement: January 1, 2016^[29][33]

See also

• Eastern Partnership
• European Economic Area
• European Neighbourhood Policy
• Future enlargement of the European Union
• Stabilisation and Association Process
• Stability Pact for South Eastern Europe

Notes

References

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