Frustrated EU warns Ukraine time is running out for trade talks

KIEV, July 26 Fri Jul 26, 2013 10:36am EDT

KIEV, July 26 (Reuters) - The European Union warned Ukraine on Friday that time was running out to resolve a number of bilateral trade disputes and secure the signing of a landmark free trade agreement, after the latest round of talks produced no results.

The former Soviet republic hopes to sign agreements on political association and free trade with the 28-member bloc at a summit in Vilnius, Lithuania, in November.

But it has yet to meet conditions set out by Brussels, which is concerned by the Ukrainian government's protectionist policies as well as what it sees as politically motivated persecution of political opponents.

Struggling to bridge a large foreign trade deficit, Ukraine has, in particular, introduced new barriers against imports of goods ranging from cars to coke, a fuel produced from coal and used in steel production.

It has also announced plans to raise tariff ceilings on hundreds of other goods, which have drawn sharp criticism from many other members of the World Trade Organisation.

Peter Balas, deputy head of the Directorate General for Trade of the European Commission, visited Kiev this week to discuss the issues with Ukrainian economy minister Ihor Prasolov, the EU delegation to Ukraine said in a statement.

It said Brussels had hoped Ukraine would address its concerns regarding the restrictions on the imports of cars, coke, renewable energy equipment and other goods.

"However, these expectations could not be realised: the Ukrainian side was not in a position to offer complete solution to any of the EU's concerns," the delegation said.

"The maximum that was promised is that the Ukraine authorities would continue, in the coming period, internal reflections about possible solutions."

The Kiev government said it would then send its proposals to Brussels. The EU made clear it was disappointed.

"The EU side is concerned that the only outcome of the long consultation process is just the promise of further bilateral discussions," it said.

"There are increasing concerns that the time is running out to find mutually acceptable solutions."

The EU shelved the association and free trade deals with Ukraine in 2011 after a local court jailed former prime minister Yulia Tymoshenko, a key opponent of President Viktor Yanukovich. It criticised the case as an example of selective justice.

The bloc has warned that if the deals fall through again, it will take years to get back to them as Ukraine goes through elections, and EU institutions face a turnover of top personnel. (Reporting by Olzhas Auyezov; Editing by Richard Balmforth and David Evans)