Tony Blair, the British prime minister , and Jose Manuel Barroso, president of the EU Commission, on Thursday praised Kiev's liberal leadership and said that market status was a critical stage in fulfilling an action plan that Ukraine hopes will eventually lead to EU membership.
Blair predicted that the measure would be followed by admission early next year to the World Trade Organisation, further talks to ease visa regulations and the start of negotiations on a free trade deal.
Blair told reporters at a Ukraine-EU summit in Kiev: "All these are important in their own right. But their greatest importance is their symbolism of a new and deeper and stronger relationship between the European Union and Ukraine."
Barroso praised Ukraine's "great progress" since Viktor Yushchenko became president in January. He said market status and accords on navigation, aviation and energy proved that the EU "has been delivering on our promises".
Yushchenko has kept membership of EU and Nato his main focus despite a turbulent first year in office since winning election on a wave of "Orange Revolution" protests against poll fraud.
Blair (R) praised Ukraine's liberal
leadership under Yuschenko
Yushchenko sacked Yulia Tymoshenko, his prime minister, in September after clashes over privatisation and state regulation of the economy.
Ukraine's WTO membership bid fell short after parliament failed to pass key bills and negotiations on a trade deal with Washington and other countries remained incomplete.
Ukraine has been seeking market economy status to boost trade relations with the 25-member bloc, now on its borders since the EU's eastward expansion last May.
It sees the status as vital to allowing Ukrainian steel producers, major exporters and drivers behind economic growth, to avoid anti-dumping measures against competitive goods.
Largest trade partner
The EU is Ukraine's largest trade partner, with a turnover of $22 billion a year overtaking its $20 billion annual trade with Russia.
Blair, who holds the EU's rotating presidency, said he believed that Ukraine was on track with its three-year European action plan.
"I believe it is on course," he said. "One of the things that happens in democracy is that occasionally you get some turbulence. I've got some experience of it myself."
"One of the things that happens in democracy is that occasionally you get some turbulence"
British prime minister
He said Ukraine's prospects in Europe were "very, very clear indeed" because of a commitment to democracy and market reforms.
Blair said: "This is a vision that has to be shared by a country, not just by a leader. And if that can be done, then the possibilities are limitless in the development of our
Yushchenko said the country's aim was EU integration. He said: "We will do everything so that within the framework of this strategic aim European Union citizens will see no new problems with Ukrainian membership, but rather new advantages."