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Ukraine’s EU trade prospects stir threats from Russia

YALTA, Ukraine – When Hillary Rodham Clinton gave a shout-out to Ukrainian chocolate, it was clear that the battle had been joined.

Russia wants Ukraine firmly in its camp, but time is running out. To gain the predominant say over its neighbor’s destiny, Moscow has been furiously trying to derail a pending trade agreement between Ukraine and the European Union. Russian President Vladimir V. Putin’s government has been deploying insults, dire warnings and customs delays in its efforts to sway the decision.

And, for a while, it refused to import chocolates from Ukraine’s premier confectionery company, after Russia’s usually pliant health inspectors suddenly discovered heretofore undetected sanitary shortcomings in the candy boxes.

Russia’s tactics in a struggle that pits East versus West are “totally stupid and counterproductive,” said Viktor Pinchuk, one of Ukraine’s wealthiest men and the host of an international conference here that ended Saturday, after Clinton and a parade of American and European leaders urged Ukraine to finalize the deal with the EU.

Putin wants Ukraine to join the customs union of Russia, Belarus and Kazakhstan instead, but his strategy has been all vinegar and no honey. The Ukrainian prime minister, Mykola Y. Azarov, called Russia’s demands an attempt at “humiliation.”

Yet as much as Putin seems to be pushing Ukraine into Europe’s embrace, ambivalence here runs deep. Azarov and Ukrainian President Viktor F. Yanukovych have said they intend to sign with the EU in November, but they have a way of hedging every statement.

It’s a momentous choice. Ukraine has the chance to opt for a road that in theory would extend European values of transparency and the rule of law far to the east. Or it can join Russia in a financial and cultural zone that is increasingly defining itself as separate from the West and not answerable to Western norms. As a nation of 46 million people, Ukraine would be a significant addition to Putin’s Eurasian Union.

If Ukraine is to sign what is called an association agreement with the EU, dismantling most trade barriers, it will have to pursue far-reaching legal reforms and renounce the sort of “selective justice” that has landed former Prime Minister Yulia V. Tymoshenko and other political opponents of the current government in prison.

Yanukovych said Friday that he wants to release her, as Europe demands, but just can’t seem to find the legal means to do so. His opponents contend that he’s also reluctant to tackle the country’s endemic corruption.

There’s another factor. Ukraine’s trade volumes with Russia and with the EU are about the same, even without the chocolate, which means there are powerful interests here in favor of Moscow, in sectors that might be hurt if the country is opened up to European competitors.

Joining Russia could mean instant relief on the price of natural gas, much of which is imported from Russia. Siding with the EU could have long-term benefits, but, Azarov said, the immediate effect would be negative, as Ukraine struggles to implement reforms and deal with Russian trade sanctions.

“It isn’t all roses,” he said. “There are thorns, as well.”

But the Russians seem to be even spikier. Sergey Y. Glazyev, who is Putin’s assistant in charge of enlisting Ukraine, showed up here Saturday and threatened Ukraine with even more sanitary-inspection problems if it joins Europe, as well as new trade barriers and no hopes for an easing of gas prices. He said the hit to Ukraine’s economy from the loss of the Russian market would be in the billions of dollars.

Glazyev questioned whether the EU, which is dealing with its own less-than-robust economy, is prepared to take on the huge burden that he said Ukraine would inevitably become.

As for chocolate, Clinton called it “excellent” and said it “can be exported to anywhere in the world with the proper effort.”