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7 October, 2013

The government is not doing everything necessary for the Agreement to be signed

At the Yalta European Strategy (YES) summit, The Ukrainian Week talks to Petro Poroshenko about European integration, Ukrainian-Russian relations and Kyiv mayor election. Interviewed by Sébastien Gobert

UW: How did you enjoy the YES (Yalta European Strategy)? 

I think this is very positive. From my point of view, this is a unique platform for foreigners, top experts and politicians throughout the world to discuss the strategy for Ukraine in this changing, difficult world. From year to year, the level of the guest is higher and higher. Especially now. This year is crucial for Ukraine, maybe one of the most important in Ukrainian history. You know we have the opportunity to sign an Association Agreement and a Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union. We have this unique chance and not everybody is happy with this Ukrainian choice. And I am proud of the way Ukraine reacts to this pressure. It demonstrates that all Ukrainians united and that the idea of the European Association has become a national idea.

READ ALSO: YES, We CANnot

Undoubtedly, Yalta was a success. The level of support Ukraine received from different parts of the world – the USA, the EU, Asian countries, Turkey – was unprecedented. And it was also the first time that all Ukrainian guests, be it the President, the opposition and more, spoke with one voice.

UW: You say that the quality of the guests is higher and higher every year. How do you assess the quality of Sergei Glazyev?

Any guest is welcome. We should give an opportunity to everyone to present their position. Sergei Glazyev did not come as a private person but as one of chief advisors to Russian President Vladimir Putin on Ukraine. Most probably these are the messages Putin wanted to have delivered, although he would not do it personally. I think we should at least understand the Russian position. Everybody wants to present the situation as a trade war between Russia and Ukraine. Or even worse: a war Ukraine wages against Russia for entering some corporation which would not be in Russia's favor. This is simply not true.

First of all, this is a fight for Ukraine's sovereignty. This is a struggle for Ukraine to have the right to make sovereign decisions decided by Ukrainian people. Not by Russians, not by Europeans or anyone else. Ukraine is a 45-million people country, with an ancient history, a unique economy and a great potential. We should demonstrate that it is absolutely useless to exert pressures on Ukraine. Mr. Glazyev wanted to shape the discussion in some form of a propaganda speech, stressing the economic differences that some form of this or that kind of integration would create. This was not the place to have such a discussion. We would be happy to discuss. As Minister of Economy (March-December 2012 – Ed.) and Minister of Foreign Affairs (October 2009 – March 2010 – Ed.), I gladly presented the text of the Association Agreement and DCFTA before even it was initialed. Because Russia is our main trading partner and we want to be absolutely transparent in this process. If they think that there might be any danger to their economy, they should let us know and we should take it into account. And that was done in mid-2012. But Russians did not make any comments on that. It means that either they accept it or it is not interesting for them. I accept both versions.

READ ALSO: Yalta Summit, Association and Tymoshenko: the clock is ticking

Once again, this is not a war against Russia. As an economist, I believe this is very helpful for Russia. Starting in 2006, Russia called for a free-trade area from Lisbon to Vladivostok. So here is the very bridge between East and West, which is an absolutely necessary part of this idea. Second, only 6% of Russian exports go to Customs Union countries. And almost 50% of Customs Union's exports go to the EU. So the discussion on standards and technical regulations is useless because they are already adequate to our biggest trading partners' standards. And as for demands for food security, for quality product standards: I want to give you some very important news - people in the EU, in Ukraine and in Russia are all equal.

UW: Yet some of them are more equal than others...

Not when it comes to food security (laughing).

Some producers are more equal than others for sure. But the discussion on differences of standards and national differences is absolutely useless. It should be either dangerous for people's health or not dangerous. And that's it.

UW: You are talking about understanding Glazyev's message. Yet, did you not come back from the YES meeting a bit worried? It seemed to me that Glazyev expressed quite many warnings and threats against Ukraine.

Every single argument that Glazyev used was expressed before YES. There was no new message expressed then. We should just change the rhetoric. These are two sovereign countries. We are two trading partners. It's mutually beneficial.

Yes, Russia supplies us with a big amount of gas and oil. But Ukraine is now the third largest consumer of Russian gas. And that should be quite important for this country. The world energy market is changing significantly. So, conditions of trade for most Ukrainian and Russian exports have considerably changed. Take coal. U.S. shale gas and coal appeared on the market and the priced dropped twofold. The price of LNG (liquefied natural gas) dropped significantly as well. So what are we waiting for next? For the LNG carriers to be completed in Korea. Within two to three years, provided we have logistic facilities, the situation with energy supplies can be totally changed. This is not in favor of Russia. The world changes and we should be ready for this change. If there is an alternative to purchase LNG, Russia will not be able to have any influence on the natural gas supply. So the relationship with Ukraine has to be understood as a mutually beneficial trade. 

READ ALSO: Unconventional Prospects

Also, the only engine for developing the economy is to encourage competition. And if you build up a barrier or an iron curtain between Ukraine and Russia, you will remain with old-style economic mechanisms.

UW: Yet apparently Glazyev was not only talking about building up an iron curtain between Ukraine and Russia. He also mentioned the possibility to erect a curtain amongst Ukrainians themselves by stirring up ethnic tensions.

We have our own experts on what is going on in our country. We do not comment on the situation in Russia, which has its own important problems. Please notice that because of Glazyev's position, the level of support for European integration significantly increased, from 42% before to over 50% today. If people demand a referendum, I will be absolutely ready for it. I believe that if the EU shows us a light at the end of the tunnel, Ukrainians will go for it.

We asked the some 30% of respondents who support joining of the Customs Union to explain their choice. The answers: first, this is our tradition. Second, this is our culture because we have the same films and songs. Third, this is our language. And more or less, that's it. And then we asked the supporters of European integration to explain their position. Because we want new standards for education, for health care, for freedom of speech and democracy, for pensions, salaries and everything like that, as well as for security which is an important element. If you compare, you see that the Customs Union is everything of our past. And the EU is our future. Who votes for the EU? Young educated people. Who votes for the Customs Union? Old people with poorer education. And this is a tremendous change that already happens in Ukraine, no matter if it's west, east or south of the country.

Don't you think that Russians, Kazakhs and Belarusians who are already members of the Customs Union, do not seek higher standards in education, health care and more?

READ ALSO: Tug ‘O’ War

Do you believe in that? Just think how many Ukrainian universities are among the top universities in the world? One, regardless of the ranking system used. How many Russian? Nine. How many European? More than half of the ranking. This is an answer. We are happy to enhance this development and I think I do my best for Russia to be part of this process. Because Russia should cooperate with the EU. Not only because of trades, but because this is a question of values.

UW: According to you, there is no war between Ukraine and Russia. Yet there seems to be a very strong Russian focus on your company, Roshen. How do you explain it?

I think that the political component is quite significant here. But the position of Roshen, as far as I understand and know, is that we do not try to attract political attention or explain and solve everything with political methods alone. For two months now, we send messages to our Russian partners and tell them we are ready to open up the production process, the quality system control, both for raw materials and the finished products. If you think you may have any objections, please come and check. Within the past two months, nobody came and we did not receive any answer, not even anything on the nature of the complaint in written form. We saw it only through the media.

UW: No Russian inspectors have visited Ukraine's Roshen factories?

Absolutely not. We sent them an invitation three times. They replied that they needed more time for preparation, more documents. We told them to come, all documents are here, at our factories. But everybody in Russia, in the West and in Ukraine understands that neither Georgian mineral water, Borjomi, nor Lithuanian cheese, nor Polish apples, nor Belarusian dairy products have anything to do with food security. It is something different. This is the case here.

READ ALSO: Trade Conflict: Europe grows more sympathetic about Ukraine

UW: Do you think it is possible to solve the problem before the Vilnius Summit?

I don't know. Solving it is about finding a compromise between two parties. As far as we are concerned, we are ready to demonstrate absolute openness in trying to solve the issue. You will be the first to know that Roshen asked the EU commission to appoint an independent inspector of Ukrainian chocolate. His judgment would be absolutely independent on the issues of quality and security. We did it already in eleven countries after Russia closed its market. Neither Kazakhstan, nor Belarus, nor Armenian, nor Turkmenistan, nor Tajikistan, nor Moldova, nor Georgia, nor Azerbaijan turned unhappy with Roshen chocolate after conducting independent tests!

UW: Even Hillary Clinton seems very happy with the chocolates...

Yes, this is also very important. A friend in need is a friend indeed. When a series of Western politicians of such importance, like the Secretary of State, come to support not only Ukrainian aspirations for European integration but also Ukrainian producers which are not in a good position, this is crucial. For me, even more important than the address Hillary Clinton gave, it was the reaction of the audience listening to her. It was a very nice round of applause. For me, it was the main impact of this speech. That is exactly how a friend should react. And the very next day, Polish Foreign Minister Radek Sikorski said that he started to eat only Roshen chocolates.

UW: Does this support translate into practical effects?

Yes. It is a too short period of time to give you accurate statistics but I can promise you that it will have very practical implications. It was funny but I couldn’t find any Roshen chocolates in Crimean stores near Yalta – I wanted to get one for a gift. They ran out of them!

UW: Your company suffers heavy losses as a result of this export ban from Russia. And yet the sales have jumped 13% in Ukraine?

Yes, but it hardly offsets the losses we faced. But I believe we will find a compromise soon. The trains and planes from Ukraine to Russia are just full of Roshen products carried by Russian tourists. It is quite funny to see that Russian decisions do not harm only Ukrainians, but also Russians. It was the same with Borjomi.

UW: So Roshen is going to survive?

No doubt. We are not in a state a war. A political dialogue is good. But if we talk about open economies and competitiveness, it is better if the state does not interfere because this is very harmful to business.

READ ALSO: John O'Sullivan: Russia’s actions against Ukraine are signs for NATO and the West to re-open negotiations

UW: When it comes to that, are you satisfied with the level of support of the Ukrainian government in this case?

I think it is better to ask the Ukrainian government itself. I think that we have some support from the Ministry of Economy and the Ministry of Agriculture in the discussion with Russia. Some messages from the Prime Minister. But this is not exactly how the government should act in this situation, to support local exporters. I hope we will have a discussion with the government about that in a very near future.

UW: I see you are a bit critical of the government's stance. You worked as Trade and Economic Development Minister under this very Premier (Mykola Azarov – Ed.). Would you see yourself working within that Cabinet again?

I see myself as working for Ukraine, even from a different position. I accept this type of proposal only when I believe it can really change the situation for the better. In the current situation, I cannot see that this is the main purpose of the government. That's why I am out. It was my own decision. I thought it would be more clear and transparent to work in the Parliament. But if I were invited to work in a strong-coalition government with strong support from people and possibilities to carry out reforms, improve business climate, build up democracy and so on, this would be my place.

UW: And yet the current government seems to be the most dedicated to signing the Association Agreement, which would enhance these processes...

I do not think it's the government doing it. I think this is coincidence. Is the government a winner here? Yes. Is the President a winner here? Yes. Is the opposition a winner in this situation? Yes. Is Ukraine a winner here? Yes, for sure. Is Poroshenko a winner here? Yes. I was one of the first to start negotiations with the EU. I take significant efforts to make sure that this Association Agreement is signed. We cannot say that this is thanks to the sole efforts of Azarov or Poroshenko. It is a fair play.

But do you really have the feeling that the government is doing what is necessary for the Agreement to be signed?

READ ALSO: Back to Europe Project

No. The Parliament is doing what is necessary. But when it comes to the visa free regime, for example, we still have three points that the government does not tackle and we strongly criticize the Cabinet for that. The government's work is not enough to ensure that all EU laws are adopted. It does not initiate changes to the customs tariffs, which are really non-transparent. We do not support that and we ask for changes. Supporting EU law is just a slogan. But we should keep focused and understand that the main interest of the law is the very essence of it.

UW: When you say that you work for Ukraine and for its best interest, do you believe that your running for mayor of Kyiv would be helping Ukraine?

First of all, we should demonstrate that we are a European country. And for that, we have to have elections. And that the end of the day, the answer is given by the people. Now opinion polls say that if Klitschko does not want to go, I am the most popular politician to run for mayor. I have only one condition: to have the support of the whole opposition. If yes, I run. If they want to have some internal fights, I am out. Kyiv is overwhelmingly in support of opposition forces. The opposition should be united.

 

INFO:

Petro Poroshenko, currently MP, served as Minister of Economic Development and Trade in March-December 2012 in Mykola Azarov's Cabinet of Ministers, and Minister of Foreign Affairs in October 2009-March 2010, as well as Secretary of the National Security and Fedence Council in February-September 2005 when Viktor Yushchenko was President. He is one of the richest Ukrainians and the owner of Roshen confectionary corporation; UkrPromInvest, a vehicle producer and trader; and Channel 5, a TV-channel, among other assets.


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