* Deal with EU to save Ukraine 500 mln euros a year in
* Unilateral measures part of wider EU trade and aid for
By Robin Emmott
BRUSSELS, March 20 Influential European
lawmakers backed a package of nearly 500 million euros ($695
million) in annual trade benefits for Ukraine on Thursday,
opening the way for duty-free Ukrainian exports into the
European Union from late April.
Brussels is giving Ukraine unfettered access to the
28-nation bloc's 500 million consumers even before a proposed
bilateral free-trade accord comes into force later this year to
cement Kiev's historic shift away from Russia.
"The people of Ukraine fought on the Maidan for democracy
and rule of law," said EU lawmaker Daniel Caspary, a member of
the European Parliament's International Trade Committee, which
approved the deal. "The EU must not let them down."
The committee approved the plan by 22 votes to 2, with 1
abstention. The move is an important step to revive the trade
and aid accord with Ukraine which ousted president Viktor
Yanukovich rejected in November in favour of cash from Moscow.
That rejection triggered the protests that led to bloodshed
in Kiev and Yanukovich's flight to Russia last month, giving the
European Union a second chance to offer a so-called Association
Agreement to Ukraine.
The ouster of the pro-Russian Yanukovich led to a standoff
between Russia and Ukraine that eventually resulted in Crimea's
voting to secede from Ukraine and join Russia. European leaders
will meet later on Thursday to discuss possible retaliation for
Russia's takeover of the region.
EU leaders and Ukraine's prime minister will sign the
political part of the free-trade agreement at the two-day summit
in Brussels from Thursday. The full European Parliament is due
to sign off on the EU's unilateral measures in mid-April.
That will allow 98 percent of all customs duties to be
removed for Ukrainian goods entering the European Union from
April 23, a deal worth 487 million euros a year and a boost for
Ukraine's near-bankrupt economy.
Ukraine had been teetering towards default even before
pro-Western unrest in Kiev and Russia's occupation of the
Crimea. Trade benefits alone will not save the economy, but they
should help stabilise it along with EU and IMF financing.
"Ukraine's new government needs strong and immediate EU help
to fight off external pressures and to overcome economic and
financial hardships," said lawmaker Pawel Zalewski.
While the bilateral trade relationship is relatively small -
38.3 billion euros in 2012 - the European Union is Ukraine's top
trading partner, representing about a third of the country's
total trade, slightly more than with Russia.
The EU's offer will run until Nov. 1, at which time both
sides aim to have the full free-trade deal enacted under the
Association Agreement, and following May presidential elections
Ukraine will not have to provide extra access to EU exports
in return until both sides sign the free-trade deal.
($1 = 0.7189 Euros)
(Reporting by Robin Emmott; Editing by Larry King)