The signing of the association agreement between Ukraine and the European Union will be positive for Ukraine's trade over the long term, but there could be short- to medium-term negative impact largely related to Russia's reaction, Standard & Poor's Rating Services said.

"Russia would likely respond by imposing trade restrictions on Ukraine similar to those of August 2013. Exports to Russia would likely fall as a result. Russia accounted for 26% of Ukrainian commodities exports in 2012 and 39% of services exports," S&P said in a press release issued on Friday.

The agency recalled that in 2012 Russia accounted for 26% of Ukrainian commodities exports and 39% of services exports.

At the same time, S&P said that uncertainty remains as to whether or not Ukraine would sign the agreement at the Eastern Partnership Summit in Vilnius on November 28-29, 2013, as the talks about the status of jailed former prime minister Yulia Tymoshenko were ongoing.

Under the S&P's base scenario, the agency does not expect Ukraine to hold large-scale reforms, which makes an agreement on a multi-lateral external financing program unlikely.

"Such a program would probably involve reforms including some combination of the following: fiscal consolidation, making the domestic gas market more market-oriented, accelerating the resolution of nonperforming loans in the financial sector, and increasing exchange-rate flexibility," S&P said.

The agency sees limited prospects for fiscal consolidation in Ukraine. Its estimate of the average change in general government debt over 2013-2016 is just over 6% of GDP. S&P expects the general government net debt burden to increase to 40% of GDP in 2014 from 34% this year, with the devaluation adding several percentage points of GDP to the debt stock above the headline deficit. About 52% of gross debt is denominated in foreign currency, although mostly on concessional terms. The agency includes the promissory notes to the government's debt in 2013.

"We expect the government's local currency debt and general government deficit to continue to be financed largely by the NBU and state controlled banks. The NBU holds 60% of local currency debt as of August 2013 while banks hold 32%, which is about 8% of commercial bank assets," S&P said.