It’s 30 years since the European Union (EU) emerged from the chrysalis of its predecessor. It has become a great economic success, and perhaps for that reason, entry to the 27-member bloc is complicated and difficult, requiring a huge bureaucratic effort and years of fundamental changes to a wide range of national institutions.
But the common market, the free trade area at the heart of the union, remains the economic nucleus of the EU project as it has been since the 1950s. It is a neoliberal construct based on market values and transparency of state borders for economic purposes. And it could provide a shortcut for Ukraine in need of a strong signal of European solidarity.
Ukraine should become a part of the common market as soon as possible, without waiting for other EU accession procedures. The EU-Ukraine summit of 2-3 February has made considerable progress in this direction. The Priority Action Plan for 2023-24, the document, adopted as a result of this summit deals with a number of technical and legal issues related to so-called “industrial visa-free regime” – i.e., stable ground for further establishment of freedom of movement for goods. Yet, this still depends on Ukraine’s ability to further align according to the EU’s requirements, the so-called acquis.
Despite expressions of optimism from both sides, Ukraine’s path toward the common market is neither swift nor fully fledged. The Action Plan contains no statement of the final destination. Moreover, it is of a limited nature as it is primarily related to the goods, while the issue of the freedom of movement of the labor force and the freedom to provide services is not on the negotiating table.
A simple, swift, and permanent opening of the common market would have a huge benefit for Ukraine, which — it’s worth remembering — has suffered a body blow from Russian aggression, with its economy slumping 30.4% last year.
The benefits would be as follows:
First, it would open the largest and richest market in the world for Ukrainian businesses and the labor force. To counteract the effects of Russia’s war, Ukraine needs extraordinary steps to boost economic reconstruction. Access to the common market would throw a lifeline to struggling Ukrainian businesses and mitigate the shocks of war on the economy. Revitalized businesses would be better able to regain and even expand their potential so that they can take part in post-war activities. And greater free trade would help the EU too. Ukraine is, after all, a significant market with a pre-war population of 43 million. And this must be emphasized — accession to the common market is not a for demand privileges; it concerns the establishment of equal rights so that Ukraine can earn its keep. In the longer run, this will mean lower European outlays for the reconstruction effort.
Second, common market accession does not imply access to the extremely sensitive areas of the EU common budget such as agricultural subsidies or the cohesion policy with all its structural funds. As previous waves of the EU enlargement have demonstrated, financial assistance of this sort often comes at the expense of other EU sectors, as poorer members take a greater share of the cake. This invariably sparks fierce debates. In the case of Ukraine, it might also silence those who worry about the possible corrupt misuse of EU funds; they simply wouldn’t be an issue under this proposal (while the Kyiv government has meanwhile pledged to revamp its efforts to deal with this issue.)
Third, Ukraine’s common market accession would mark an important political moment. Domestically, it would send a strong signal to civil society that we have moved to the practical from the theoretical, following decades of debates, discussions, promises, and conditions. It has been almost 10 years since the EU-Ukraine Association Agreement was signed in the aftermath of the Revolution of Dignity of 2014, and since Russia’s war of aggression began. The achievement of EU candidate status in 2022 unfortunately lacks practical content. It is time for something more concrete.
Fourth, there is nothing new to invent; participation in the common market without EU membership is a well-established formula with all the rules and procedures in place. The system has been successfully used by the European Free Trade Association (EFTA) countries of Switzerland, Norway, Iceland, and Lichtenstein for many years. Thus, from institutional, organizational, and a number of other perspectives, Ukraine’s accession to the common market would be relatively easy.
Russia’s full-scale invasion generated enormous solidary among European states and brought the solemn declaration that Ukraine is a part of the Euro-Atlantic family of nations.
Common market accession would of course echo that sentiment, but it would also have significant practical effects. It is one of the few available options to boost Ukraine’s economy in the short term, something desperately needed right now. It would assist in the restoration of the economy from the bottom up, helping to grow small- and medium-sized enterprises. The results would be rapid and the benefits clear — Europe would be helping Ukraine to help itself.
Oleksandr Moskalenko is an academic researcher focusing on European politics. He is an In-resident Fellow at the Center for European Policy Analysis (CEPA, Washington, DC). He is a Ph.D. in European Law .
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.