EU Trade Commissioner Peter Mandelson shakes hands with Ukrainian President Viktor Yushenko in Kiev, Feb. 19, 2008. (Xinhua Photo) Photo Gallery>>>

    BRUSSELS, Feb. 18 (Xinhua) -- The European Union (EU) has launched free trade talks with Ukraine, the European Commission said on Monday.

    The talks, formally launched by EU Trade Commissioner Peter Mandelson and Ukrainian President Viktor Yushenko in Kiev, followed the finalization of Ukraine's accession to the World Trade Organization (WTO) earlier this month, which was a prerequisite for the free trade negotiations.

    "It's a sign of the EU's commitment to Ukraine that the ink is hardly dry on its WTO accession agreement and we are here in Kiev to build on that membership with a new stage in our economic relations," said Mandelson.

    Mandelson said the free trade talks would not only boost trade and investment between the EU and Ukraine, but also integrate Ukraine into the global economy and deepen partnership between Kiev and Brussels.

    The EU and Ukraine plan to build on the liberalization set in motion by WTO membership with a wide-ranging agreement that will bring regulatory standards into convergence and improve access for investment in both directions, the commission said in a statement.

    The free trade agreement would be a core part of the New Enhanced Agreement being negotiated between the EU and Ukraine, which will cover all areas of their relationship.

    Ukraine is currently the EU's 25th largest export market and the EU is Ukraine's first trading partner, followed by Russia. Trade between the EU and Ukraine reached over 26 billion euros in 2006, and has been growing steadily in recent years.

    In terms of foreign investment, the EU is by far the largest foreign investor in Ukraine. Foreign direct investment from the previous 25 EU member states amounted to 5.5 billion euros in 2006,compared to just above 230 million euros in 2003.