International Centre for Policy Studies Institute of World Policy A NEW FOREIGN POLICY FOR UKRAINE EXPERT PERSPECTIVES Kyiv 2010 This publication was prepared by the International Centre for Policy Studies as part of a project implemented under the Ukraine National Initiatives to Enhance Reforms (UNITER) program, which is funded by the United States Agency for International Development (USAID) and implemented by Pact Ukraine. The publication of this re- port was made possible by the generous support of the American people through the United States Agency for International Development (USAID). The views expressed herein are those of the authors and do not necessarily reflect those of USAID, Pact Inc. or the United States Government. No part of this publication may be reproduced or transferred in any form or by any means, graphic, electronic, or including photocopying or by any information storage retrieval system, without proper reference to the original source. This publication was prepared in collaboration with the Institute of World Policy. Project manager: Sacha Tessier-Stall Senior expert: Aliona Hetmanchuk Project coordinators: Kateryna Zarembo, Serhiy Solodkyi English translator: Lidia Wolanskyj Design and Layout: Tetiana Ivanko The opinions expressed herein are strictly those of the authors and do not necessarily represent the views of the International Centre for Policy Studies or the Institute of World Policy. TABLE OF CONTENTS Foreword ..............................................................................................................5 Executive Summary ..............................................................................................6 Ukraine and the World Today ..............................................................................16 I. Ukraine’s Key Partners Ukraine and Russia: Learning from mistakes .......................................................27 Ukraine and the EU: Integration from within ......................................................41 Ukraine and the United States: The Era of pragmatism .........................................56 Developing Regional Partnerships Ukraine and Poland: Neighbors divided by Europe ...............................................68 Ukraine and Romania: A Love-hate relationship ..................................................78 Ukraine and Moldova: Time to talk openly .........................................................84 Ukraine and Belarus: The Neighborhood see-saw ................................................91 Turkey: The Forgotten strategic partner .............................................................96 Ukraine and Georgia: United we stand ............................................................102 II. Ukraine’s priority areas Security Policy: Fitting in ...................................................................................111 Ukraine and Energy: When the past kills the future ..........................................123 Ukraine and the Environment: Together in Noah’s Ark ......................................137 About the Authors ............................................................................................149 FOREWORD The best-kept secret of the 2010 election campaign was a simple one: despite all the talk about economic and social policy, these fall outside the President’s pur- view. It is foreign and defense policy that constitute the President’s main con- stitutional prerogative. The absence of debate on this issue, due both to the economic crisis and to the ambivalent positions of the principal candidates, has led to intense speculation and to the perpetuation of myths surrounding the foreign policy stances of the main contenders. Viktor Yanukovych has worked hard to shed his image as a Kremlin pawn. Yulia Tymoshenko, after arguing for NATO membership, has spared no effort in demonstrating her ability to work with Moscow. Most of the other candidates argued for a non-bloc status of some sort. Ukraine’s main challenge today is not to make a choice between East and West, but to improve relations with both. The country needs to identify its key partners and define its foreign policy priorities. The new Head of State will have to choose between a range of potential strate- gies. One is the “multi-vectoral” balancing act perfected by Leonid Kuchma, which can yield major payoffs but requires great diplomatic nimbleness. An- other is making a clear “civilizational” choice, aligning foreign – and some- times domestic – policy with that of the EU or Russia. Or the new President may search for a “third way,” focusing on regional leadership, searching for new international partners, or even moving toward isolationism. It is essential that Ukraine’s new foreign policy be the subject of a substantive debate. To contribute to this discussion, two of Ukraine’s foremost think- tanks – the International Centre for Policy Studies and the Institute of World Policy – have brought together some of the finest foreign policy thinkers in the country, representing a wide range of viewpoints, to propose innovative directions. In the coming five years, Ukraine will have to balance a wide range of values and interests. Aimed at analysts and policymakers of all stripes, these pages are intended to structure the debate that must precede the fundamental choices ahead. Olga Shumylo Aliona HETMANCHUK Director Director International Centre for Policy Studies Institute of World Policy Foreword 5 EXECUTIVE SUMMARY Ukraine’s new President will face a daunting set of foreign policy challenges. The country’s relations with Russia, the EU, and the US are at their lowest point in years, the result of empty declarations and deficient strategic thinking. Never since independence has Kyiv been on such bad terms with both its western and its eastern partners simultaneously. In addition, Ukraine’s lack of strategy has hand- icapped its ability to pursue its national interest in several strategic areas—securi- ty, regional partnerships, energy security and increasingly, the environment. If Ukraine is to regain its international luster, it will have to think strategically. That means choosing key partners and issues – and defining clear strategies to- ward each. This report identifies three essential partners for Kyiv, and four pri- ority areas for Ukraine’s foreign policy. I. Ukraine’s Key Partners 1. Russia Serhyi Solodkyi Kyiv’s relations with Moscow have, since 2004, reached an unprecedented low. Restoring a good relationship with Russia must therefore top the new Presi- dent’s foreign policy agenda. Reestablishing a healthy relationship with Ukraine’s northern neighbor is an end in itself, but also a means: Brussels and Washington have tired of the political and economic instability caused by Ukraine-Russia spats, and both are looking to improve their own relationships with Moscow. At the same time, Russia itself has grown weary of what it sees as western interference in its sphere of influence, and it fears that other countries may emulate Ukraine’s decision to follow a different developmental model than its own. It will be up to Kyiv to avoid both unnecessary belligerence and the “unilateral loyalty” it has tended to display since independence. Selected recommendations launch frank dialogue with the Russian leadership on Ukraine’s Euro-At- lantic integration, through ministerial-level bilateral talks and/or trilateral consultations bringing together Ukraine, Russia, and NATO; foster and depoliticize the study of Ukrainian history in Ukraine and Russia; consolidate Ukraine’s position as an essential transit state for EU-bound Russian hydrocarbons, including by gaining support from abroad; 6 A New Foreign Policy for Ukraine: Expert perspectives make clear that Ukraine will not accept any foreign military presence (Rus- sian or otherwise) on its soil after the 2017 expiration of the Russian Black Sea Fleet’s lease in Sevastopol. 2. The European Union Tetiana Sylina Ukrainians—both Ukraine’s main political forces and its population as a whole—favor EU accession, which is seen as a means of enhancing the coun- try’s independence, territorial integrity, and economic and energy security. But Ukraine’s politicians seem unable to grasp what European integration demands of them, especially when it comes to crucial reforms. Years of unkept promises, political and economic instability, and a deteriorating relationship with Russia have seriously damaged Kyiv’s standing in the EU. Hence overcoming “Ukraine fatigue” in both Brussels and other European capitals will have to top the new President’s agenda. This will mean both pushing through internal reforms and developing more mature relationships with Ukraine’s foreign partners. Selected recommendations improve relations with Moscow; intensify diplomatic contacts with Germany, whose Minister of Foreign Af- fairs represents a party open to Ukraine eventually joining the EU; improve bilateral relations with some of the more Ukraine-skeptic member states, and consider replacing Ukraine’s ambassadors in these countries with more creative diplomats; become a leader within the Eastern Partnership; create a Ministry for European Integration under the First Deputy Premier, or combine the posts of Minister of Foreign Affairs and First Deputy Pre- mier; conclude negotiations on the EU-Ukraine Association Agreement. The document should specifically lay out the Ukraine’s prospects for member- ship and for the institution of a visa-free regime after completion of the rel- evant