EU trade chief Karel De Gucht in Athens yesterday. Photo: Reuters

Ukraine would see the economic benefits of a free-trade deal with the European Union within weeks of signing the accord, helping the near-bankrupt nation’s standing in the eyes of its creditors, the EU’s trade chief said yesterday.

Despite the upheaval since pro-EU Ukrainians drove the Russian-backed President Viktor Yanukovych from power, EU Trade Commissioner Karel De Gucht told Reuters that Brussels’ offer of a comprehensive trade deal was Ukraine’s for the taking.

“The offer stands, that’s very clear. We are ready to sign when Ukraine is ready to sign,” De Gucht said in an interview following a meeting of EU trade ministers in Athens.

“The benefits will be seen a couple of weeks after the signature.”

Unrest erupted in Ukraine after Yanukovych abandoned the proposed trade pact with the EU and turned instead towards Moscow, which offered a $15 billion bailout and cheaper supplies of natural gas.

Compared to billions of dollars in cheap loans, even the EU’s offer of unfettered access to the 28-nation bloc’s 500 million consumers could not compete, crushing Brussels efforts to build closer relations with its eastern neighbours. But in a dramatic turn of events at the weekend, Ukraine’s Parliament voted Yanukovych out of office and set early presidential elections for May 25.

That gives the European Union a second chance to offer Ukraine a deal that De Gucht said would save Ukrainian exporters almost €500 million a year in cuts in EU import duties and mean a historic shift away from Russia.

De Gucht said it was up to Ukraine and EU leaders to decide whether they sign the association agreement now or after the May elections. Whatever the choice, Brussels is ready to implement the free-trade deal immediately and the European Parliament has agreed to approve it, De Gucht said.

In the long run, Ukraine’s economic output could grow an additional 1 per cent a year because of increased exports in goods and services, as well as more European investment in Ukraine, according to an EU study.

Under the accord, the EU will open access to its market more quickly so the country will enjoy better access to the bloc than the EU will get in Ukraine in the first few years.

One reason Yanukovych rejected the deal in November was because he said it would cost Kiev $500 billion in trade with Russia over the coming years, while implementing EU legal and other standards would cost another $104 billion.

De Gucht countered that Ukraine would be free to continue to trade with Russia, while Ukrainian companies would receive technical help and funds to help adapt to EU regulations and bid for lucrative EU public works contracts.

Russia is trying to maintain its influence over Ukraine and other newly-independent states it dominated during the Soviet era, especially those with energy pipelines and large ethnic Russian communities.

Moscow is offering Ukraine membership of its customs union with Belarus and Kazakhstan, an area that Ukraine could not be a part of if it joined the EU’s pact because Belarus and Kazakhstan are not members of the World Trade Organisation.

De Gucht said the EU’s offer was not directed against Russia. He said the so-called association agreement with the European Union, which includes the free-trade deal, was a special opening for modernising Ukraine’s sick economy.

“Much more important is the dynamic that would result from such an agreement and yes it would influence the judgement of international investors and creditors with respect to Ukraine,” said De Gucht, a Belgian lawyer.

“What is of importance is to bring together all the elements to give Ukraine a new future. That will imply financial support because they are in a very dismal financial situation. It is also about this deep and compre­hensive free-trade agreement, which gives them a unique opportunity .”