Ukraine 12Dec2013
People attend a rally to support pro-European integration at Independence Square in central Kiev, Dec. 12, 2013. Reuters

The all-out street war in Ukraine’s capital city of Kiev between anti-government protesters and security forces had its beginnings in late November, when President Viktor Yanukovych rejected a bid for closer integration of his country with the European Union.

Protests began peacefully, but reports that security services used excessive force on demonstrators escalated the situation. As of Wednesday, dozens of people have been killed, including protesters and police officers, and hundreds injured.

For years Yanukovych promised Ukrainians that he would sign an agreement with the EU, which would benefit Ukraine’s economy substantially. Protesters felt betrayed that he suddenly and without explanation shifted his position. All fingers pointed to Russia as the main mover behind the decision; it was Moscow that pressured Yanukovych not to sign the agreement, said Samuel Charap, a senior fellow for Russia and Eurasia at the International Institute for Strategic Studies in London.

Soon after Yanukovych's decision, Russian President Vladimir Putin offered Ukraine an economic aid package worth $15 billion and a 33 percent discount on Russian natural gas in late December, angering protesters even more as they viewed this as a reward for pulling out of the European deal.

But while the agreement with Europe that Yanukovich refused to sign was smaller than what the Kremlin offered, it was in fact not a bad deal at all.

Here is what Ukraine is missing out on, according to data from the European Commission, the executive arm of the European Union:

*An eventual free trade agreement between Ukraine and the EU would save the country $670 million annually because of reduced EU import taxes. Ukraine would lose around $538 million in import duties coming from the EU.

*Ukraine’s agriculture sector would have benefited from cuts in duties: $45 million for agriculture products and $72 million for processed agriculture products. In addition, new market opportunities in the EU and higher production standards would help investment, stimulate the modernization of agriculture and improve labor conditions. Agriculture makes up 10 percent of Ukraine's gross domestic product, a much higher share than in the major Western economies (in the U.S. it's 2 percent).

*The industrial sector would have also benefited from the reduction of taxes on machinery and appliances by at least $103 million. Ukraine would also be able to cut duties on vehicles by $161 million.