EU-Ukraine summit to open amid hopes in Kiev to win market economy status

President Viktor Yushchenko will host a EU-Ukraine summit Thursday, which this ex-Soviet republic hopes will bring it long-awaited recognition as a free market economy and further bind Ukraine to its European neighbors.

Obtaining this prized status could open doors closed to Ukrainian exporters, and encourage European investors to take another look at this poor nation of 47 million.

It also would be a major achievement for the pro-Western Yushchenko, who has struggled to prove to Ukrainians that his flirtations with the West were bringing results despite a lukewarm response to Ukraine's hopes of EU membership from an enlargement-weary European Union.

British Prime Minister Tony Blair, whose country holds the rotating EU presidency, will head up the EU delegation, together with the bloc's foreign policy chief Javier Solana and Trade Commissioner Peter Mandelson.

"This summit is the first after the Orange Revolution ... (and) we feel there is an absolutely different environment in relations," Ukraine's Deputy Foreign Minister Anton Buteyko said. "We feel a real spirit of partnership."

Topping the agenda will be the EU's plans to recognize Ukraine as a market economy, a label that would help Ukraine trade more easily with the bloc's 25 member states.

"The summit is expected to announce that Ukraine has now met the technical criteria for the granting of market economy status," the European Commission said in a statement Wednesday.

The European Union is already Ukraine's No. 1 trade partner, with 32 percent of Ukrainian exports going to EU countries, 31 percent to Russia and other former Soviet republics and 24 percent to Asia, said Tomas Fiala, managing director of the Kiev-based Dragon Capital investment house. In comparison, Ukraine's neighbor Poland, already an EU member, sends almost 80 percent of its exports to the EU.

"The potential for growth is very high _ Ukraine just needs access," he said. "It won't happen in a day but this is a very important step."

Among other benefits from market economy status, it allows a country to defend itself directly against European accusations of illegally dumping products cheaply on the European market, which can result in costly punitive duties.

"It would mean that our entrepreneurs will not lose millions and millions of euros as a result of anti-dumping investigations," Buteyko said.

The EU-Ukraine summit is expected also to result in accords on cooperation in the fields of energy, aviation and satellite technology.

Ukraine is also pushing for the European Union to simplify some of the visa requirements for Ukrainian citizens, and the EU, in turn, wants Ukraine to sign an agreement to take back any refugee-seekers that enter the EU via Ukraine, a transit country. Those negotiations remain ongoing, however.

Human Rights Watch on Wednesday criticized Ukraine for mistreating asylum seekers, and warned that pressing Ukraine to accept more would only aggravate the problem.

Yushchenko has repeatedly praised Ukraine's budding relationship with the EU, even as Brussels has told Kiev that it must first work on reforms before it talks about possible membership.

EU officials in Kiev noted, however, that one-third of the EU's members have sent official delegations to Ukraine since the Orange Revolution _ a sign of improved ties. Thursday's summit is seen as another step forward, officials said, AP reported. V.A.