EU rejects Russian pressure on Ukraine, seeks trade ties

STRASBOURG, France (Reuters) - The European Union rejected on Wednesday Russian pressure to deter Ukraine and other former Soviet republics from deepening trade ties with Europe, saying any kind of retaliation was unacceptable.

European Commission President Jose Manuel Barroso addresses the European Parliament during a debate on the state of union, in Strasbourg, September 11, 2013. REUTERS/Vincent Kessler

Moscow and Brussels are each trying to convince Georgia, Moldova and Ukraine to join their respective trade blocs, and Russia has imposed trade bans and threatened gas supply cuts to try to halt their neighbours’ EU integration.

Addressing these tensions, European Commission President Jose Manuel Barroso said the EU would not countenance efforts to stop eastern European countries seeking closer ties with the 28-nation European Union.

“We cannot accept any attempt to limit these countries’ own sovereign choices,” Barroso said in his annual state of the union speech to the European Parliament in Strasbourg. “We cannot turn our back on them,” he said.

The EU’s enlargement chief Stefan Fule was set to reinforce Barroso’s criticism later on Wednesday, according to an advance copy of his speech to the parliament.

“Any threats from Russia linked to the possible signing of agreements with the European Union are unacceptable,” Fule was expected to say.

He will warn against any “misuse of energy pricing” in an apparent reference to Russia’s threats to cut gas supplies in Ukraine and Moldova as winter approaches, or to promise much cheaper gas to coax Kiev into a Russian customs union.

Swedish Foreign Minister Carl Bildt last week called the threats “economic warfare”.

Moscow announced a ban on imports of Moldovan wine and spirits on Tuesday.

The Kremlin is also concerned Ukraine’s EU agreement could lead to the re-export of EU goods into Russia, mostly tariff-free, where they could undercut sales of Russian-made products.

But the tussle is as much about political influence as trade. The EU wants to bring the former Soviet countries formally into its orbit by signing agreements at an “Eastern Partnership” summit in Vilnius in November, including a wide-ranging free-trade pact with Ukraine.

Armenia said this month it will join Russia’s customs union, to which Belarus and Kazakhstan already belong.

Ukrainian officials signalled during a visit to Brussels in August their determination to sign an EU trade deal they have already initialled.

But the EU has set democratic progress in Ukraine as a condition for signing the agreement with Kiev in November and it wants to see jailed ex-Ukraine prime minister Yulia Tymoshenko freed before sealing the pact.

“The possibility of signing a comprehensive free-trade and association agreement depends on the capacity of the government in Kiev to show ... progress in the Tymoshenko case,” Martin Schulz, president of the European Parliament, told a news conference.

(The story was refiled to restore dropped word “freed” in penultimate paragraph)

Additional reporting by Robin Emmott and Justyna Pawlak; Editing by Paul Taylor