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FORMER UKRAINIAN PREMIER SET TO PARTICIPATE IN RULING COALITION IN 2006. Former Ukrainian Prime Minister Viktor Yanukovych said in an interview published on 10 November that his Party of Regions is ready to participate in forming a coalition government following the 2006 parliamentary elections, Interfax-Ukraine reported. "Today no political force is able to form either a parliamentary majority or a government," Yanukovych said. "Therefore, we will have a coalition. We treat all parties as equal partners." Simultaneously Yanukovych cast doubt on the possibility of forming a coalition with the Yuliya Tymoshenko Bloc, saying the bloc is gravitating toward still greater "populism and irresponsibility." Yanukovych noted that Ukraine's potential federalization and NATO membership should be subject to a referendum, along with granting official status to the Russian language if this last issue is not resolved in parliament. JM

UKRAINIAN CABINET AGAIN DOWNGRADES 2005 GDP GROWTH EXPECTATION. Economy Minister Arseniy Yatsenyuk said at a cabinet meeting on 9 November that the new estimate of the country's gross domestic product (GDP) in 2005 is 3.8 percent, AP reported. He added that currently GDP growth is 2.8 percent year-on-year. Last year, Ukraine recorded 12 percent economic growth. Initially the government of former Prime Minister Yuliya Tymoshenko predicted GDP growth this year of 8.2 percent, but in September decreased its prognosis to 6-6.5 percent. Several days later, the new government of Prime Minister Yuriy Yekhanurov lowered the forecast to 4.5-5 percent. JM

UKRAINIAN PRESIDENT VETOES POULTRY IMPORT BAN. President Viktor Yushchenko has vetoed a bill narrowly passed by the Verkhovna Rada last month that would impose a six-month ban on all poultry imports in an attempt to protect the country from bird flu (see "RFE/RL Newsline," 21 October 2005), AFP reported on 8 November. Yushchenko reportedly said the measure would harm the country's bid to join the World Trade Organization. JM


RFE/RL Belarus, Ukraine, and Moldova Report Vol. 7, No. 38, 10 November 2005

A Survey of Developments in Belarus, Ukraine, and Moldova by the Regional Specialists of RFE/RL's Newsline Team.

NEW POLISH PRESIDENT TALKS TOUGH ON RUSSIA, BELARUS. Pro-American. Anti-Russian. Germany-skeptical. Lech Kaczynski, the conservative Warsaw mayor who stormed to victory in a presidential runoff in Poland on 23 October, seems to fit all three descriptions. Analysts say Poland could be poised to send a policy jolt through both the European Union and Russia by intensifying its support for democracy among its eastern neighbors and its criticism of the emerging energy partnership between Moscow and Berlin. But campaign promises are one thing, and government policies are another.

The day before his election, Kaczynski appeared to give a clear glimpse of his foreign policy priorities for Poland, the biggest and most influential of the EU's new members.

Speaking in Warsaw, Kaczynski listed the first state visits he wants to make as president.

"Every visit requires agreement of both sides. But I would like to visit Washington D.C. first," Kaczynski said. "I hope I will be able to pay a visit to the Vatican. This, of course, is important because Poland is predominantly a Roman Catholic nation. Then Brussels -- our European partners. And Kyiv."

Washington. The Vatican. Brussels. Kyiv. Four very different destinations, they provide a hint of where nationalist Kaczynski seems to want to take Poland.

And he could have unique power to do so. His twin brother Jaroslaw leads the socially conservative Law and Justice party that is set to form a new government. But talks with possible coalition partners have been rocky, and the outcome could undermine Kaczynski's vows to push through bold changes.

Catholic Poland, lodged between Germany and Russia, has long been pro-American for security and other reasons. Under former President Aleksander Kwasniewski, that stance translated into support for the U.S. war in Iraq and strong backing for democracy groups in Belarus and Ukraine.

But if Kaczynski's campaign promises are any indication, Poland's positions on these issues look set to be bolstered, according to Eugeniusz Smolar, president of Warsaw's Center for International Relations think tank.

"They will be strengthened -- I have no doubt about it," Smolar said. "And this government [will have] no inhibitions to raise its voice at the table."

Poland is particularly concerned about energy. In September, without consultation with Warsaw, Russia and Germany agreed to build a gas pipeline under the Baltic Sea that will cut off Poland from transit fees. Warsaw also fears being left at the mercy of Moscow with regard to energy.

Analyst Smolar told RFE/RL that Poles are still smarting over the pipeline deal, which came amid what some portray as an emerging German-Russian partnership. He said he is certain the new government will be taking up the issue with Berlin.

"I have no doubt that this will be the case," Smolar said. "I have no doubt that this new government will do absolutely everything possible in order to make the government in Berlin [know] that something which they did one-sidedly is in contravention to the practice of the European Union. It was not consulted. It did hit not only Polish economic interests, but also the feeling of security."

Baltic countries have also expressed concern over the pipeline, which was agreed under outgoing German Chancellor Gerhard Schroeder.

Speaking in Vilnius today, future German Chancellor Angela Merkel said she understands Lithuania's concerns over the pipeline and that Russia "could try to use this project as an instrument of political pressure."

Smolar said the Polish government is likely to take the issue to the EU, since energy is a security issue that affects the entire 25-country bloc.

"We should debate it together as partners in the European Union," Smolar said. "This is the feeling, that what happened does not help in the process of the unification of Europe. And I'm sure that this government will be very outspoken in its relations not only with Germany, but also with other countries, and also for example with Scandinavia, countries like Sweden, Finland, Norway, Baltic countries, [who] are as worried about the ecological aspects about this project as Poles are."

Meanwhile, activists said they expect Kaczynksi to live up to his promises to increase Poland's support of democracy in Belarus, Ukraine, and elsewhere.

Pawel Kazanecki is an activist on Belarus with the Eastern European Democracy Center, a Warsaw-based nongovernmental organization.

"That was declared by several politicians from both winning parties, that they believe this kind of program to be very important, and that money that was given to these programs should be at least doubled," Kazanecki said.

But since his election victory, Kaczynksi has toned down his campaign rhetoric toward both Germany and Russia.

He had criticized some Germans for seeking compensation for property lost in what is now Poland after World War II. But in an interview today in Germany's "Bild" daily, the new president stressed he was "partner and friend of the Germans."

As Kaczynski has also softened his tone toward Moscow, Kazanecki said there is some concern the president might renege on increasing support for democracy abroad.

"We should also understand and remember that at least in the context of Belarus and Ukraine, Poland has a big problem with the relationship with Russia," Kazanecki said. "And in this geopolitical situation, the newly elected president has just declared that the main issue for Poland is to make a better relationship with Russia. So in the context in politics toward Belarus and Ukraine, it's difficult to say now what it means."

It is also, for now, difficult to say just what Poland's new government will look like. (Jeffrey Donovan)


KYIV, MOSCOW VIE FOR WTO ENTRY. Speaking at the Carnegie Endowment for International Peace in Washington on 1 November, Ukrainian Prime Minister Yuriy Yekhanurov reiterated Kyiv's official hope that Ukraine will become a member of the World Trade Organization (WTO) by the end of this year. Ukraine's potential access to the WTO could be approved by the Sixth WTO Ministerial Conference in Hong Kong on 13-18 December. However, it does not seem very likely that prior to this forum Kyiv will manage to receive endorsement for its bid from all interested WTO members.

One of these interested members is the United States, which has so far not signed a protocol with Ukraine on mutual access to commodity and service markets in both countries. The signing of the protocol is tantamount to Washington's approval of Ukraine's WTO entry. Ukraine has already signed similar bilateral protocols with 38 countries represented in the WTO Working Party that deals with its membership application. Australia is another important country that has so far been reluctant to sign such a document with Ukraine.

Both bilateral and multilateral negotiations regarding WTO accession are confidential and all documents involved in the negotiation process are restricted until its completion. What prevents Washington from giving a go-ahead to Ukraine's WTO membership can be inferred from what Yekhanurov said in Washington. In general, Yekhanurov said that Ukraine "has considerably advanced" in WTO talks with the United States. But he signaled some substantial problems as well.

First, Yekhanurov admitted on 1 November that Ukraine has not yet brought all of its customs duties in line with WTO standards and requirements. According to him, this task has been fulfilled up to 80 percent by now. Speaking the same day in Kyiv, Ukrainian President Viktor Yushchenko estimated that Ukraine's legislation is just 65 percent in line with WTO requirements.

The same day, in an apparent effort to strengthen Yekhanurov's position during the Washington talks, the Verkhovna Rada passed two bills required for WTO entry pertaining to imports and protection of domestic producers. However, the process of adjusting Ukraine's legislation to WTO standards is not easy, and it is not clear when it is likely to be completed. In July, Communist Party deputies blared sirens and provoked scuffles in the Verkhovna Rada in order to prevent the adoption of a package of WTO-oriented bills. The Communist Party and other Ukrainian leftist groups see Ukraine's WTO membership as a catastrophe for the Ukrainian economy, which in their opinion cannot compete with more developed production capacities in the West.

Second, Yekhanurov said in Washington that Ukraine hopes "to find mutual understanding" with the United States on Ukraine's tariffs on exports of scrap steel and ban on exports of nonferrous metals. Earlier this year U.S. steel manufacturers called for trade sanctions against Ukraine (as well as Russia) in response to the barrier taxes and tariffs imposed by these two countries on export of scraps. According to U.S. steel mills, these moves by Ukraine and Russia, which reportedly resulted in doubling the composite-steel price in 2003-2004, were trade-distorting practices. Scrap metal is the raw material for nearly two-thirds of the U.S. steel industry. It seems that Washington has made its backing for Ukraine's WTO bid.

Yekhanurov made a very grim prediction as to what would happen if Ukraine failed to join the WTO ahead of Russia, which is slated to do so in 2006. "If Russia joins [the WTO] earlier than we do, it will be practically impossible for Ukraine to become a WTO member," Yekhanurov told journalists in Washington on 2 November. He did not elaborate. But it is telling that Russian media have already signaled similar apprehensions from the Russian side. Russian political commentators and analysts fear that if Kyiv joins the WTO ahead of Moscow, Ukraine will surely enter bilateral negotiations with Russia on the latter's WTO-accession conditions and will try to make these conditions very hard for the Russians.

There are both economic and political reasons for expecting a potential Russian-Ukrainian dispute over WTO membership. Russia and Ukraine currently have serious disagreements over trade -- Kyiv, for example, is very displeased with Russian restrictions imposed on Ukrainian exports of steel pipes and sugar. Therefore, Moscow fears that Kyiv could make these restrictions a bargaining chip in bilateral WTO talks. Moreover, Moscow is concerned that Kyiv's accession to the WTO this year could complicate bilateral trade regarding those commodities on which both countries do not impose any customs duties. Some politicians in Moscow have suggested that Ukraine could start reexporting some of the Western commodities that are taxed by Russia in its trade with the West but not with Ukraine.

On the other hand, Kyiv is apparently afraid that if Russia joins the WTO first, the Kremlin will try to tie Ukraine more closely to Russia not only economically but also politically. Russia has not abandoned its plan for creating a Single Economic Space along with Belarus, Kazakhstan, and Ukraine. Ukraine has subscribed to the idea of establishing a free economic zone within such a space, but spoken resolutely against forming a customs union of the four countries or supranational executive bodies. It is possible that Russia could use its WTO membership as leverage to make Ukraine more compliant in accepting the Single Economic Space as a more rigid political and economic formation. (Jan Maksymiuk)

"RFE/RL Belarus, Ukraine, and Moldova Report" is prepared by Jan Maksymiuk on the basis of a variety of sources including reporting by "RFE/RL Newsline" and RFE/RL's broadcast services. It is distributed every Tuesday.