#17 - RW 274
The Globe and Mail (Canada)
September 18, 2003
Former Soviet republics poised to sign trade deal
Critics fear economic pact signals attempt to consolidate power in hands of Kremlin
By MARK MacKINNON

KIEV — The presidents of Russia, Ukraine, Kazakhstan and Belarus gather today in the Black Sea port of Yalta where they plan to sign a document that critics say is a big step toward recreating the Russian regional hegemony that existed during the time of the Soviet Union.The four countries, all former Soviet republics, agreed to create a "Common Economic Space" -- a sort of free-trade zone that calls for them to open their borders to trade, unify their tax and customs systems and devise shared tariff and energy-transport policies.

The idea of the states moving closer together and eliminating trade barriers is a popular one with the region's business leaders -- especially since the countries are shut out of the European Union and World Trade Organization. The interreliance born during the Soviet years has barely diminished, and Belarus, Ukraine and Kazakhstan count Russia as their largest trading partner.

But nationalists, particularly those in Ukraine, are worried about the pact's political dimensions. Voting on all matters within the proposed CES would be based on the relative size of the member countries' economies -- meaning that Russia, by far the largest of the four, could well end up imposing tax and customs policies on its smaller neighbours.

The net effect, critics say, would be to hand decision-making power over the entire region back to the Kremlin.

Russian proponents of the pact have raised the idea of making the ruble the region's sole official currency.

Although the idea was shelved, the suggestion is ringing alarm bells in a region that was forced to use the Soviet currency until just 12 years ago.

"Ukraine will become a puppet in the hands of a restored imperial power," said Oles Shevchenko, a former parliamentarian who organized a protest outside the cabinet offices in downtown Kiev this week.

About 200 demonstrators were there yesterday.

Opposition to the deal is not widespread, but what exists was expressed most fiercely among the intelligentsia in Ukraine. Such dissent is stifled in Belarus and Kazakhstan, and Russians are mostly pleased with the idea.

Even in Ukraine, some polls show that as much as 70 per cent of the population favour the deal, though analysts said the numbers mostly indicate how few people understand the pact, which has only partly been made public.

"Most Ukrainians do not know what it is, and the government has not made a proper effort to tell people what it is," said Sergei Maximenko, head of the Kiev Centre for East-West Studies. Most, he said, simply back the idea of better relations and easier trade with Russia.

"I believe this is a project initiated by the Russian Federation to serve its broad geopolitical interests and that Russia is going to dominate the new structure."

Some in Ukraine, including members of President Leonid Kuchma's cabinet, have said the document may contradict the country's constitution by handing some of its sovereignty to Moscow. Others worry that the signing of the CES will annul any chance Ukraine has of joining the European Union or the North Atlantic Treaty Organization in the near future.

Mr. Kuchma rallied his cabinet into supporting the CES yesterday, though ministers did so with the caveat that the agreement could not contravene Ukrainian law.

While many Ukrainians remain deeply suspicious of Russia, Mr. Kuchma has likened the two countries' relations to the rapprochement between France and Germany after the Second World War.

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