But Russia last week upped the pressure in its attempts to trump months-long EU talks by saying it could offer Ukraine an annual $8 billion discount on gas supplies, setting the stage for a tug-of-war between Brussels and Moscow for Ukraine's allegiance.
Ukraine's choice is about more than trade: It is seen as crucial in deciding the geopolitical path of this former Soviet republic of 45 million, wedged between Russia and Europe.
A free-trade agreement with the EU is seen as a stepping stone to deeper integration with the 27-nation bloc; joining the customs union with Russia, Belarus and Kazakhstan would rule out an EU deal and tie it to fellow former Soviet states.From Wall Street Journal, others [1,2] have written about Russia's attempt to persuade Ukraine to drop a free trade agreement with the European Union. This persuasion involves threats that a EU trade agreement would cost Ukraine economically. EU data on Ukraine trade (2009 figures) shows that the "EU27" is the biggest trade partner for Ukraine, with Russia second. However, a custom union with Russia would end EU talks. Putin is forcing Ukraine to choose between two different options. I'd say that getting a gas "discount" is not worth the price for Ukraine. This discount could easily be removed if Ukraine and Russia get into a disagreement in the future. In fact there should be an asterisk attached to the proposed discount...
* Contingent on Ukraine's good behavior as determined by Russia
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