Ukraine Rejects Soviet Common Market Treaty

On the eve of the signing of a treaty binding the remaining Soviet republics in an economic union, the Ukraine pulled out of the accord Thursday, declaring the agreement would only preserve central control of the country and rob it of the chance to become truly independent.

As the country’s second-richest republic after the Russian Federation, the Ukraine dealt a potentially fatal blow--and consciously so--to efforts to establish a common market and then a political confederation on the ruins of the Soviet Union.

But Ukrainian officials said that the proposed treaty, the result of weeks of intense negotiations and prepared for signing in a Kremlin ceremony today, still gives central authorities too much power, letting them make most of the fundamental economic decisions rather than limiting them to coordinating trade among the republics.

Although the Ukraine reaffirmed its willingness to participate in a more loosely structured economic grouping, its demand for the renegotiation of major elements of the treaty is a direct challenge to Russia Federation leadership in shaping a new union that it has made clear it intends to lead.

“Russia will sign in any case,” Russian Federation Vice President Alexander V. Rutskoi declared, shrugging off the Ukrainian action. “I do not know if the Ukraine will survive without Russia, but Russia will definitely survive without the Ukraine.”

Amid the Soviet Union’s continuing political tumult, rebellious lawmakers on Thursday defied Russian Federation President Boris N. Yeltsin, and, after an uproarious daylong debate, voted down his request to postpone local elections from December until spring.

Yeltsin had sought the postponement, fearing “the opposition” would win and block planned economic reforms. His defeat illustrated the sharp struggle for power under way here and how uncertain reforms remain, despite the failure of the conservatives’ August coup.

In other developments:

* Azerbaijani President Ayaz Mutalibov canceled a meeting with Soviet President Mikhail S. Gorbachev to discuss ways to end the conflict with neighboring Armenia after an upsurge in fighting in the disputed Armenian enclave of Nagorno-Karabakh left 10 dead overnight. Gorbachev had hoped to bring Mutalibov together with Armenia’s leader, Levon Ter-Petrosyan.

* Ivan S. Silayev, chairman of the country’s transitional economic management committee, said the vast Soviet military-industrial complex will be cut back severely and restructured as part of economic reforms. “We do not favor preserving this monster,” he said.

Ukrainian officials said that the economic treaty, because of powers given to central authorities, deprives their republic of what they regard as fundamental rights of any state--control over its budget and taxes, issuance of its own currency, creation of its own national bank.

“The accord is very dangerous for it once again tries to bring back the central structure of the former Soviet Union,” Volodymir Vhriniv, a deputy chairman of the Ukrainian Parliament, commented in Kiev, the Ukrainian capital. “We cannot agree to this.”

Ukrainian officials also objected to what they saw as the Russian Federation’s assumption of many functions of the former Soviet central government, its seizure of virtually all state-owned enterprises on its territory and the general Russian assertion of leadership of the new union.

“We must consolidate the Ukrainian nation,” Ivan Plyushch, another deputy chairman of Parliament, said in explaining the decision.

With the Ukraine’s withdrawal, nine of the Soviet Union’s remaining 12 republics are now expected to sign the treaty. It establishes a common market with a single monetary and banking system, coordinated customs rules and tariffs and cooperation in transport, communications and energy.

Yeltsin had, ironically, just reached agreement with Gorbachev on the accord’s final elements, satisfying Yeltsin’s demands for safeguards against a strong central authority and assuring the Russian Federation veto power in both the budget and banking systems.

“We have substantially revised our stand on the center,” Yeltsin later told a judicial conference. “The present task is to dismantle the remnants of the unitary, imperial structures. . . . We intend to act so that Russia’s interests are best secured. The leadership of the republic is working out measures to protect its economic sovereignty. . . .”

Yeltsin suffered a serious political setback in his own legislature Thursday as deputies rejected his request to put off local elections and allow him to appoint regional, municipal and even village administrators.

In a debate so fierce that the Soviet news agency Tass described it as a virtual “brawl,” his lieutenants were shouted down as they tried to insist that the Russian Supreme Soviet, the republic’s legislature, must obey its president.

But, in one vote after another, the deputies voted against Yeltsin as his critics charged him with usurping powers of the legislature and moving toward an autocratic, one-man rule.

Yeltsin, speaking later in a television interview, was philosophical. “We should not dramatize the situation,” he said. “Do we really want all, the full 100%, supporting the president in Russia?

“I am in a difficult situation,” he said, reflecting on his first 100 days in office, “but I knew what I was challenging. I knew this will not be simple, and, therefore, I asked for a credit of trust for 2 or 2 1/2 years. I have strong commitments before the people, and I have to accomplish all that I promised.

“I do not think we have to be unanimous in opinions with everybody--like we have for 70-plus years. What we achieved during this period is known to all. Different views on things, a certain pluralism and struggle of opinions should be present.”

Yeltsin, accepting the emergence of an opposition as “a normal thing in a civilized state,” said that he expects his popularity, still massive, to decline as he undertakes the difficult measures necessary to transform the country’s economy from state ownership and central planning to private entrepreneurship and market forces.

Mary Mycio, a special correspondent in Kiev, and Viktor K. Grebenshikov, a reporter in The Times’ Moscow Bureau, contributed to this report.