Deep and Comprehensive Free Trade Area


The Deep and Comprehensive Free Trade Areas are three free trade areas established between the European Union, and Georgia, Moldova and Ukraine respectively. The DCFTAs are part of each country's EU Association Agreement. They allow Georgia, Moldova and Ukraine access to the European Single Market in selected sectors and grant EU investors in those sectors the same regulatory environment in the associated country as in the EU. The agreements with Moldova and Georgia have been ratified and officially entered into force in July 2016, although parts of them were already provisionally applied. The agreement with Ukraine was provisionally applied since 1 January 2016 and formally entered into force on 1 September 2017.
Unlike standard free trade areas, the DCFTA is aimed to offer the associated country the "four freedoms" of the EU Single Market: free movement of goods, services, capital, and people. Movement of people however, is in form of visa-free regime for short stay travel, while movement of workers remains within the remit of the EU Member States. The DCFTA is an "example of the integration of a Non-EEA-Member into the EU Single Market".
The European Parliament passed a resolution in 2014 stating that "in accordance with Article 49 of the Treaty on European Union, Georgia, Moldova and Ukraine, as well as any other European country, have a European perspective and can apply for EU membership in compliance with the principles of democracy, respect for fundamental freedoms and human rights, minority rights and ensuring the rule of law", thus formally recognizing the possibility of a future EU membership of the three countries.

Background

While work on signing a deep and comprehensive free trade agreement between Ukraine and the EU first began in 1999, formal negotiations between the Ukrainian government and the EU Trade Commissioner were not launched until 18 February 2008. As of May 2011 there remained three outstanding issues to be resolved in the free trade deal: quotas on Ukrainian grain exports, access to the EU's services market and geographical names of Ukrainian commodities. Aside from these issues, the deal was ready. Despite those outstanding issues, Ukraine was ready to sign the agreement as it stood. Although it wanted stronger wording on enlargement prospects and access to the EU market for its truckers, Ukraine had more than many other candidates at the equivalent stage of the process. The finalised agreement was initialed on 19 July 2012. Ratification of the DCFTA, like the AA, has been stalled by the EU over concerns over the rule of law in Ukraine. This includes the application of selective justice, as well as amending electoral laws. As a result, the role of Ukrainian oligarchs in sanctioning the agreement was also questioned.
If Ukraine would choose the agreement, the Eurasian Economic Commission's Customs Union of Belarus, Kazakhstan and Russia would withdraw from free trade agreements with the country, according to Russian presidential advisor Sergei Glazyev. However, on 21 November 2013 a Ukrainian government decree suspended preparations for signing the agreement that was scheduled to be signed during a 28–29 November 2013 EU summit in Vilnius, and it was not signed. The decision to put off signing the association agreement led to the 2014 Ukrainian revolution, called Euromaidan.
During the Eastern Partnership summit in Riga on 22 May 2015, the EU and its partners declared that the 'provisional application' of the DCFTA will start on 1 January 2016. However, the Riga Declaration also stated that "constructive efforts in the trilateral consultations on EU-Ukraine DCFTA implementation are important", which Anders Åslund, Senior Fellow of the Atlantic Council, interpreted as meaning Russia would have to give consent first.
According to the EaP Civil Society Forum, the EU plans, in 2017-2020 to shift the focus of its assistance for 2017–20 to the implementation of the DCFTA to ensure legislation and parameters align with EU standards.

Effects

The EU-Ukraine DCFTA provisionally entered into force on 1 January 2016. According to European Commission, "The DCFTA will offer Ukraine a framework for modernising its trade relations and for economic development by the opening of markets via the progressive removal of customs tariffs and quotas, and by an extensive harmonisation of laws, norms and regulations in various trade-related sectors, creating the conditions for aligning key sectors of the Ukrainian economy to EU standards." "Unlike classical FTAs, it provides for both the freedom of establishment in services and non-services sectors, subject to limited reservations, and the expansion of the internal market for a set of key services sectors once Ukraine effectively implements the EU-acquis." Furthermore, Ukraine is "granted access to the EU internal market for the sectors concerned", which results in "an unprecedented level of integration".

Current DCFTAs

Georgia

Moldova

Ukraine

Cancelled DCFTAs

Armenia