EU Advances Trade Deal With Georgia as Ukraine Turns to Russia

The European Union announced plans to sign a free-trade deal with Georgia next year even as its attempt to reach a similar agreement with another former Soviet republic, Ukraine, went off the rails.

The EU today initialed so-called association agreements with Georgia and Moldova, including free-trade accords, at a summit in Vilnius, Lithuania, with the intention of signing them within a year. The delay owes partly to the necessity to translate the documents into the EU’s many languages. Once signed, the agreements must still be ratified.

A push to sign an association accord with Ukraine at the summit fell flat after the government in Kiev came under intense pressure from Russia to reject the deal. That has raised concerns that Georgia could get the same treatment.

“Now that Ukraine and Armenia have been taken care of, at least temporarily, the main problems for Russia are Moldova and Georgia,” said Svante Cornell, research director at the Central Asia-Caucasus Institute and Silk Road Studies Program in Stockholm. Russia may begin to turn the screws “this spring, probably right after Sochi,” host of the next Winter Olympics, he said.

Lithuanian Foreign Minister Linas Linkevicius said Russia will continue to pressure its neighbors, “and it’s up to Moldova’s and Georgia’s persistence and firm stance to succeed.”

Yet EU President Herman Van Rompuy said the era of the “zero-sum game” is over. “Stronger relations with the European Union do not come at the expense of relations of our eastern neighbors and other neighbors such as Russia,” he said.

On his first foreign trip as Georgia’s president, Giorgi Margvelashvili said the economic benefits that will come from closer integration with the EU will prove attractive to people in the breakaway Georgian regions of Abkhazia and South Ossetia.

To contact the reporters on this story: Helena Bedwell in Tbilisi at hbedwell@bloomberg.net; Milda Seputyte in Vilnius at mseputyte@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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