WASHINGTON—While the world’s attention was focused on developments in the Middle East, major drama was unfolding last week on NATO’s eastern border as Ukraine’s President Viktor Yanukovych suspended negotiations to deepen ties with the European Union.

Before World War II, Ukraine — in particular the western region of Galicia, a melting pot of, Ukrainians, Poles, and Jews — was a genuine driver of global culture, commerce, and civilization. The cosmopolitan city of Lviv, in the region where my Polish-Jewish family lived, was a cultural center in central-eastern Europe, where many of the 20th century’s greatest writers, scientists, and entrepreneurs were born. The unrealized potential of those who fled or perished amid the twin totalitarianisms of Adolf Hitler and Joseph Stalin may be too profound to contemplate. And yet, today in the streets of downtown Lviv, you can see both the possibilities for Ukraine and the weight of the obstacles to be overcome.

Despite being blessed with natural resources and an entrepreneurial and well-educated population, Ukraine ranks a lowly 112th on the World Bank’s ranking of ease of doing business. Nonetheless, its economic potential is well understood. Earlier this month, for example, the energy giant Chevron signed a 50-year oil and gas deal with Ukraine, which sits on vast reserves and is seeking to lessen its energy dependence on Russia. But Ukraine’s promise is held back by history, its geopolitical position, and the decisions of its political leadership, which since the historic 2004-05 Orange Revolution have wavered between fledgling democracy and autocracy, between East and West. Developments in Ukraine and on Russia’s western periphery will determine the shape of Europe and the nature of Russia’s relations with the West. They also hold the promise of giving the people of Ukraine, denied the opportunity to reclaim their past for 70 years, a chance finally to do so.

The current government led by Yanukovych is engaged in the selective prosecution of his political adversary, former Prime Minister Yulia Tymoshenko, whose own political record is hardly without blemish. U.S. and European policymakers have made Ukraine’s signing of the “Deep and Comprehensive Free Trade Area” agreement with the EU conditional upon the Tymoshenko case being justly resolved. This would require not only Tymoshenko’s release, likely to Germany, but also parole that would permit her to return to Ukraine when she chooses. At the same time, as Ukraine’s EU neighbors have pointed out, postponing a decision to sign this agreement until some future time will delay the positive effects of Ukraine’s closer association with the European Union.

It is right and appropriate that Europe has taken the lead in this matter and it is an issue that has also merited Washington’s attention, as the course Ukraine follows will also shape decisions Russia makes about its future. For this reason, the United States has actively promoted civil society and energy cooperation in Ukraine and President Barack Obama has met often with Yanukovych. Perhaps most importantly, Washington and Brussels have spoken with one voice on the steps needed for Ukraine’s closer association with the European Union.

Last week’s decision by Yanukovich was not a surprise. As a senior diplomat recently said, the current Ukrainian government “never misses an opportunity to miss an opportunity,” a point underscored by the fact that Moldova and Georgia are moving ahead with necessary steps toward their EU association agreements despite threats and trade sanctions by Russia. Still, Ukraine’s failure to meet European requirements for an association agreement should not be seen as the end of the line. The vast majority of Ukrainians now prefer an association with the EU rather than with the Russia-dominated Customs Union. Indeed, even a majority of supporters of Yanukovych’s Party of Regions tilt towards Europe. This sentiment is a great accomplishment of Western diplomacy, aided by Russian President Vladimir Putin’s heavy-handed bullying. For now, Putin can celebrate the fact that Kyiv will not be moving closer to the EU. But in the long run, there is no doubt that Ukraine’s future lies in adopting standards and practices that would enable it to have a closer association with Europe.

Lee Feinstein is a senior fellow with the German Marshall Fund of the United States (GMF) in Washington, DC, and was a senior official in the Clinton and Obama administrations.