Ukrainian Prism: Foreign Policy 2016

In 2016, relations with the United Kingdom were maintained at a significant level through British active support of Ukraine in the conflict with Russia, participation in security and defense cooperation and ongoing involvement in internal reform processes. The UK’s course toward leaving the EU restricts the influence of the state on European processes and policies, including those concerning prolongation of sanctions and perspectives of the Ukraine’s European integration, and thus raises questions again about the need to determine limits of strategic bilateral relations.

In 2016, Ukraine and Italy intensified political cooperation and slightly reduced economic relations. The government of Italy continues to support the common European policy towards Ukraine. At the same time, bilateral cooperation is also strengthened, especially in security and military medicine areas. Currently, the leadership of Italy is a reliable partner of Ukraine that supports our European integration initiatives.

In 2016, the relations between Ukraine and Canada saw a considerable intensification of the high- and top-level political dialogue, owing to substantial support the new Canadian government provided for security and defence sector reforms in Ukraine, and active development of economic co-operation. The Free Trade Agreement between Canada and Ukraine was signed, and a series of bilateral interagency agreements were prepared.

In 2016, there was a continuing active political dialogue between Ukraine and Germany on the initiative of both parties. The dialogue in the Normandy format, as well as economic cooperation, remained traditionally lively. Both countries supported the Minsk agreements as the only possible solution to the conflict in the eastern Ukraine, but during 2016, the governments expressed somewhat different positions regarding sequence of implementation of these agreements.

In 2016, Ukraine perceived the US as its main strategic partner, coordinated with it the issues of both foreign and domestic policy. There were intensive intergovernmental and interagency contacts, contractual framework of relationships has been enhanced. Due to the US position, Ukraine relied on the strong support of the international community in security issues and countering Russian aggression. But the election of the 45th President of the United States provided a significant element of uncertainty in bilateral relations.

After the long-awaited normalization of 2015, the bilateral relationships between France and Ukraine have stabilized, and its content is almost entirely determined by the needs of the Normandy format and Minsk process, and was influenced by the approaching presidential elections. Some economic activities are being developed, but there is a need in substantial progress on improving investment climate for the breakthrough.

Over the past 25 years, 2016 can be called one of the most fruitful for Ukrainian-Japanese relations, reflected in a revival of activity at both presidential and governmental levels, led to the signing of important documents. Ukrainian side considers energy efficiency projects, renewable energy, transport infrastructure, recycling, water purification and ensuring quality drinking water, development of health sector and provision of quality health services as promising directions for Japanese investments, and makes significant efforts to increase the investment attractiveness.

Political dialogue B+
In 2016, a series of factors of internal and external nature thwarted implementation of the ambitious agenda between the EU and Ukraine. In the midst of the difficult economic situation, the backpedalling process of reforms needed to create the Eurointegration assumptions became more obvious. Delays in implementation of the EU obligations in terms of the Association Agreement (AA) ratification and providing specific support for the sovereignty and territorial integrity of Ukraine also, to some extent, overshadowed the general consensus on the need for rapprochement of the Ukraine-EU relations. Economic cooperation A-
2016 was a year of sustaining previous trends in economic cooperation between Ukraine and the EU. Assistance from the EU, continuation of the sanctions against Russia and a comprehensive application of the DCFTA remain the main points of the agenda for Ukraine. Implementation of the DCFTA belongs to tasks of internal reforms, but directly influences the overall framework of bilateral cooperation. These tasks are implemented with varied success, the implementation pace of reforms in Ukraine continues to be the major obstacle in achieving a higher level of the relationships. Visa-free dialogue B
Visa-free dialogue in 2016 was for the Ukrainian society one of the most sensitive and meaningful areas of the Ukraine-EU cooperation, being high on a political agenda and in the focus of public attention. Meanwhile, the result of implementation of the dialogue criteria for visa-free regime was obtained by considerable efforts, much later than expected and was mostly prompted by a continuous pressure and monitoring of the reforms fulfillment from the civil society, international partners, the EU, etc. On the other hand, Ukraine perhaps for the first time has managed to complete the "homework", as the EU recognized, and is now expecting the EU to fulfill its obligations.

As a part of the European Neighbourhood Policy, the Eastern Partnership is represented in Ukraine through the lens of the overall European integration and specific opportunities with few to no ties to the Eastern Partnership. In 2016, Ukraine’s activities and results under the Eastern Partnership are mostly positive. However, the Ukrainian side hardly has any strategic vision of its own for the further development of the policy and its format, preferring to base it on the EU’s suggestions.

In 2016, the relations between Ukraine and the Visegrad Group countries still showed mutual interest, as proven by the institutional cooperation between Ukraine and these countries in all spheres of public life, which are already legally framed, and by the specific examples of cooperation in the region. The V4 countries are active in the European space and in their relations with Ukraine. They continue to assist in reforming various sectors of the Ukrainian State, but Ukraine remains a rather passive recipient of external aid.

2016 was marked by a significant drop in progress in the reforms of the energy sector of Ukraine in terms of its cooperation and responsibilities as a member of the Energy Community. This is due to both factors beyond Ukraine’s control, such as the Stockholm arbitration, and the growth of populism among Ukrainian political actors. The law on the national energy regulator was the only significant success, while laws on electricity market, utility metering regulation, promoting energy efficiency were voted down once again. Oil market has remained unregulated; there were hardly any reforms of the coal sector; a new energy strategy is being developed at a very slow pace; government programmes supporting energy efficiency for the population have been cut back.

Most of the problems of the energy sector have continued into 2017, including the Stockholm arbitration, split of Naftogaz of Ukraine JSC, reforms in the electricity market and the coal sector, cutting back and monetization of subsidies, launching new programmes on energy efficiency, further equalization of energy prices for all consumers.

Issues of Ukraine-NATO cooperation remained crucial to foreign and security policy of Ukraine in 2016. Despite the different approaches of some political parties to the issue of further integration, cooperation between NATO and Ukraine only deepened and occurred at all levels - presidential, parliamentary and of executive power. Establishing a position and active coordination by the Vice Prime Minister for European and Euro-Atlantic Integration of Ukraine, as well as decisions taken at the Warsaw Summit, make it possible to give a high rating to the respective direction.

2016 demonstrated that international support for the territorial integrity of Ukraine retained. Despite the considerable efforts of the Russian Federation to remove and contain restrictive sanctions in response to its military aggression against Ukraine, sanctions has not only been preserved, but also extended. However, for a number of policy changes and electoral processes in Western partner-states of Ukraine, there is a high risk of reducing international support to Ukraine in combating Russian aggression in the near future.

2016 was quite a contradictory year for the economic aspect of diplomatic activity of the country. On the one hand, the free-trade zone with the EU started functioning, and the free-trade zone agreement with Canada was signed in July. Verkhovna Rada has never ratified the latter though. Moreover, within a year, the Cabinet never managed to solve the traditional Ukrainian institutional dispute between the Ministry of Economic Development and Trade and the Ministry of Foreign Affairs concerning the leading role in foreign economic activities of the country, while Verkhovna Rada never adopted legislation required to establish of the export credit agency.

In 2016, the Ukraine–Belarus relations have traditionally stayed on the fairway of the official Minsk’s strong military and political dependence on Russia. In its relations with the neighbour, Ukraine tried to find support in the security field and actively develop trade and economic relations. However, Belarus’s certain actions, such as the UN General Assembly vote in December 2016, is still indicative of considerable differences in the foreign-policy goals of both countries.

In 2016 the dynamics of Ukrainian-Georgian relations did not meet the existing potential and previously declared political interest in development of cooperation because of some "warming" in Georgian-Russian relations and involvement of the representatives of the former Georgian government to the Ukraine’s governing. Intensification of cooperation in the transport sector can be considered as the only positive aspect, which will contribute to the overall realization of the transit potential of both countries.

In 2016, political leaders of Ukraine and Israel, not only declaratively mentioned the deep historical ties between the countries, but also expressed considerable interest in intensifying mutual cooperation. According to the long-term interests of Ukraine in Israel, some success has been achieved, such as stimulation of activities aimed at creating FTA area, signing several agreements in legal, social and economic spheres, active political dialogue continued. However, the need for more active use of the existing potential of cooperation and bringing bilateral relations to a strategic level should be noted.

Ukraine benefited to some extent after sanctions against Iran had been lifted, and reached certain results in bilateral relations in 2016, despite the absence of statements about priority of the Iranian direction in its foreign policy. The greatest interest of Ukraine in Iran is the Iranian energy procurement, while Iran is particularly interested in construction of nuclear power plants and development of Iran's aircraft building industry with the help Ukrainian experts.

After a certain intensification of relations in 2015, political and interagency dialogue with China entered a long-term hiatus. Only a significant bilateral interest in the business environment and potentially important position of Ukraine in the One Belt, One Road project keep these relations from being frozen completely.

In 2016, Ukraine managed to maintain cooperation with Lithuania at the appropriate level, despite some threat of its weakening, reflected particularly in criticisms by the Lithuanian side of corruption in Ukraine. Partially this happened due to the 25th anniversary of the renewal of diplomatic relations between the states, in the frames of which several additional bilateral agreements were signed at the level of ministries and the Road map on strategic partnership development for 2017-2018. The Russian factor continues to be an impetus for bilateral ties and cooperation in defense, economic and energy fields. Ukraine assigns an important role to Lithuania’s mediation in terms of European integration (the Association Agreement, free trade zone and visa liberalization).

The lack of a strategic vision of bilateral relations, their dependence on the political situation does not allow to put a high grade to the Moldovan direction of the Ukrainian foreign policy .

In 2016, security cooperation, promotion of reforms and active upholding of common interests on the global stage intensified. Vulnerabilities include political and institutional instability and lack of common ground in historical issues.

In 2016 the positive dynamics of relations between Ukraine and Romania remained. In April 2016, the President of Ukraine P. Poroshenko visited Romania. Romania has consistently supported Ukraine on bilateral level and in international organizations.

In 2016, it became possible to retain positive dynamics of Slovak-Ukrainian relations, increase cooperation in the energy sector and humanitarian field, and keep Slovakian support to political and security issues. At the same time, a problem of insufficient interest of the Ukrainian diplomacy to Slovakia, fragmentation of cooperation continues to exist.

Political contacts with Turkey in 2016 were extremely active. Cooperation intensified in strategic areas, particularly in the defense industry field. Economic cooperation remained the traditional engine of cooperation, but negotiations on the FTA area have not been completed.

2016 showed that Ukraine and Hungary can cooperate even when their positions on some issues differ. Unfortunately, Hungary policies continue to focus on the Transcarpathian region. In turn, Ukrainian officials perceive relations with Hungary in the light of Ukraine’s European integration policy and are in the position of recipients of assistance. The main achievement of the Ukrainian-Hungarian relations was the preservation of Hungary’s official position on non-recognition of the annexation of the Crimea and sanctions against Russia.

Political relations B-
2016 proved long-standing status of the Russian hybrid aggression against Ukraine. In the long-term, Russian military expansion and occupation of Ukrainian territory will be strengthened by Russian foreign policy aimed at delegitimization of Ukrainian state and political institutions. Bilateral political dialogue will remain blocked by mutual inability to move over fundamental negotiating positions on the territorial integrity of Ukraine. Economic relations C-
2016 saw the efforts to redefine foreign policy regarding economic cooperation with Russia. In the absence of a defined economic strategy, Ukraine’s actions are limited to response to the use of financial and economic leverage by Russia. Despite escalation in confrontation, discriminatory policies and their negative consequences, Russia continues to play an important role for the Ukrainian economy. Energy relations B+
In 2016, Ukraine continued its course to reduce dependence on Russian energy and cooperation in the energy sector. Throughout the year, natural gas was not imported, electricity was imported at a minimum level, and supplies of nuclear fuel and technology cooperation were further reduced. At the same time, under the influence of both internal and external factors, the threat related to the supply of coal and, therefore, operation of certain parts of the thermal power generation system, continued to deepen, keeping Ukraine vulnerable to the Russian hybrid aggression.

The dynamic economic development of the Asia-Pacific region, the existence of large markets for Ukrainian products continue to go almost unnoticed in the Ukrainian foreign policy. Ukraine did not succeed in creating comprehensive strategy for the development of relations with the Asia-Pacific region despite the fact that it necessity was discussed at different governmental levels. The agreements signed in 2016 are rare and are mainly declarations of intention. Despite a number of top level visits to the region, 2016 has been not marked as a positive one in dynamics of relations.

Ukraine's policy on the Middle East in 2016 showed some interest of the Ukrainian side in broader cooperation with countries of the region. However, the lack of a clear strategy in this direction makes the use of full potential of possible cooperation impossible. The activation of bilateral contacts with a number of countries in the region such as Qatar, Kuwait, UAE, Jordan should be noted. Ukraine drew more attention to regional security issues and their impact on the international system due to its non-permanent membership in the UN Security Council in 2016-2017.

In 2016, Ukraine’s attention to the Western Balkans slightly grew, as evidenced by the high-level visits, intensification of economic cooperation with certain countries and strengthening of defending Ukraine’s national interests in the region. The determining factors of the policy concerning the region were as follows: three of seven countries of the region being NATO members and two of them being the EU members; attitude of the countries of the region to the policy of the Russian Federation; presence of Ukrainian contingent within KFOR in Kosovo; search for new opportunities of economic and energy cooperation. Lack of Ukraine’s integrated approach to the Western Balkans was compensated by the trend of building relationships in the context of European integration and international support for Ukraine in its opposition to Russian aggression.

In 2016, Ukraine has strengthened cooperation with the Baltic states. Relations with each of the three countries intensified, some institutions, which work had been interrupted, resumed their activities. Among the important areas of cooperation remained supporting the territorial integrity of Ukraine and disapproving the Crimea annexation at the international level. Still, the Baltic states’ experience needs greater attention from the Ukrainian government, first of all, to study the experience of introducing Euro-integration reforms. The most dynamic cooperation among the three countries is with Lithuania. It outruns Estonia and Latvia both in directions and volumes of activities, and in foreign trade with Ukraine.

Ukraine’s interest in the Northern European countries considerably intensified in 2016. It was facilitated due to clear and unanimous position of the governments of these countries regarding the Russian aggression and territorial integrity of our country, as well as assistance and support for Ukraine on the part of the aforementioned states. High-level visits, strengthening of cooperation in economic, energy and security areas are the results of intensification of Ukraine’s interest in this region. At the same time, there is still no strategic vision and systematic and balanced approach to the Northern European countries on the part of Ukraine.

Despite intensified bilateral cooperation with the countries of the region in 2016, human and resource potential of the Latin America remained underestimated by the developers of Ukraine’s foreign policy strategy in the Western Hemisphere. It led to the further decrease of Ukrainian export indicators and consecutive loss of international support for Ukraine on the issue of opposing aggression of the Russian Federation on the part of the power elites, including Argentina, Brazil, Cuba, Mexico and Peru, which was shown by results of the UN General Assembly Committee vote for resolution proposed by Ukraine concerning humanitarian situation in the Crimea.

Ukraine’s cooperation with the South Asian states is in general reduced to relationships with the two largest countries in the region, India, and Pakistan. Our relations with both countries are traditionally called friendly and partner. At the same time, they faced certain challenges in conditions of the Russian aggression. It should be considered that India and Pakistan have gained Shanghai Cooperation Organization membership over the past year, and will continue further active cooperation with the Russian Federation. That is why Ukraine should not expect involvement of these countries as partners to oppose Russian aggression. Instead, we should focus on active communications policy and reproducing the image of Ukraine as a reliable and predictable partner.

Ukraine declared significant interest in the development and deepening of relations with the states of Sub-Saharan Africa. There is a consensus among the top Ukrainian political leadership on the growing importance of the region for the Ukraine's foreign policy, especially in terms of trade and economic tasks implementation. Meanwhile, there is a lack of a long-term program of action in the African direction at the strategic level and, consequently, an acute shortage of high political contacts. It should be noted that interest in Africa is growing among the Ukrainian business community; therefore, it is a positive signal for increased state attention to the practical implementation of measures for promotion comprehensive dialogue between official Kyiv and African partners in the future.

In 2016, there were no significant changes in Ukraine's relations with the Central Asia states. The geopolitical and geo-economic location of the region and specificity of the interstate regional cooperation make Ukraine’s access to it critically dependent on the Russian position. During this year, the Russian foreign policy was aimed at complicating political and economic relations between Ukraine and the states of Central Asia, whereas the Central Asian states demonstrated servile foreign policy in terms of Russia.

In 2016 the Black Sea vector of the foreign policy of Ukraine, as in 2015, has not received essentially new (either conceptual or practical) content from the Ukrainian authorities. Like the year before, the Black Sea region continued to be considered almost exclusively in the field of security due to the prolonged occupation of the Crimea and the threat of hostilities renewal in the region of the Azov coast. All other activities of the state authorities faded into insignificance inclusive of regional intension. It is directly linked to the Russian aggression against Ukraine and an inability to solve the existing contradictions by local mechanisms of cooperation only, in terms of increased tension in relations between Russia and NATO, Russia and the US in the Black Sea Region.

Ukraine’s election as a non-permanent member of the UN Security Council for 2016-2017 has intensified activities in this direction. Active work of the Permanent Mission, Ministry of Foreign Affairs and participation of the members of the Parliament of Ukraine in various events under the auspices of the UN allowed both to draw attention to the Ukrainian issues, and to become a fully active participant in solving problems of the global agenda. In 2016, activities were observed both in a foreign policy direction and aiming to secure more active UN assistance to Ukraine.

During 2016, activities of Ukraine in the Council of Europe (CoE) reached a certain progress compared to the previous year. In particular, it happened through revitalization of the Permanent Delegation of Ukraine to the CoE activities, due to the appointment of a new permanent representative. The illegal annexation of the Crimea and human rights violations as a consequence, the release of Ukrainian citizens - political prisoners and hostages remained an issue to discuss on most available platforms of the CoE that resulted in the adoption of several resolutions. The Action Plan of the Council of Europe for Ukraine for 2015-2017 years has acquired new impetus, particularly through increased funding of the reforms in Ukraine provided by the Plan.

A high level of intensity of cooperation between Ukraine and the OSCE, of visits and interactions within the framework of various institutionswas maintained in 2016. The most active one remains the interaction with the OSCE Special Monitoring Mission (SMM), participation of the Ukrainian representatives in the Trilateral Contact Group on peaceful settlement of the situation in Donbas. For reasons beyond Ukraine’s control, there is a problematic issue concerning the full implementation of the mandate of the Special Monitoring Mission, monitoring on the entire territory of Ukraine including the Ukraine-Russia border territories and the temporarily occupied Crimea. At the same time, there is some progress in discussion on updating the mission mandate and establishing a police mission, which would contribute to efforts of conflict resolution and post-conflict reconstruction of Donbas. Using OSCE tools for the reintegration of Crimea remains relevant.

In 2016, protection of human rights, on the one hand, remained negotiations topic and a diplomacy tool, on the other - international cooperation and Ukraine's international commitments on human rights remained a tool of implementation of the National Strategy on Human Rights. A high level of activity of the official and public diplomacy continued to persist (especially regarding human rights violations in the occupied territories and the efforts for rights protection, which are mainly used in the Minsk negotiations). The OSCE, the UN General Assembly sessions, the UN Human Rights Council, Session of the Parliamentary Assembly of the Council of Europe remained the main instruments to promote the issue of human rights protection in Ukraine.

2016 should had become the key year from the perspective of implementation of financial mechanisms to combat climate change, though due to lack of the real practical steps everything was limited to signing and ratification of the Paris Agreement on climate change, i.e. assuming new commitments to reduce greenhouse gas emission.

During the reporting year, Ukraine has demonstrated its commitment to the existing non-proliferation regimes, export control, nuclear security and fully fulfill its international obligations, although significant activity to strengthen its position in the international arena as well as improving efficiency of the political/strategic approaches were not observed.

In 2016, Ukraine increased its activity in international security, in particular through non-permanent membership in the UN Security Council, strengthening bilateral security dialogue with many countries and intensification of cooperation with NATO and other international organizations. However, activity of Ukraine is ambiguous, since while activating in African conflicts or North Korea issues, Ukraine actually lost its position in the Transnistrian peace settlement and did not pay attention to the Syrian crisis and conflicts in the Caucasus.

In 2016, the development and implementation of public diplomacy slightly lost dynamics. From the majority of strategic documents announced in 2015, just one was approved. Progress was observed in the Ministry of Foreign Affairs activities, which, in cooperation with other partners held a series of effective events of public and cultural diplomacy. However, inadequate state funding of the sector and the lack of full coordination of efforts of all institutions involved in the construction of public diplomacyremainsthe key issue.