PM-Level Talks Fail To Fix Trade Issues

KIEV, Ukraine -- Russia and Ukraine failed to find compromises at trade talks on Monday, increasing the possibility of a massive trade war between the two countries later this year.

PM Mykola Azarov (L) with his Russian counterpart Dmitry Medvedev.

Prime Minister Mykola Azarov traveled to Moscow for the talks with his Russian counterpart Dmitry Medvedev to sort out problems after Moscow had blocked imports of Ukrainian goods last week.

Azarov has been seeking to persuade Medvedev not to impose any trade sanctions against Ukraine in the event that Kiev signs a free trade deal with the European Union in November.

“I find it pointless to continue the talks on this issue,” Igor Shuvalov, Russian deputy prime minister, said quoted by the Russian state-owned news agency RIA Novosti.

“The Ukrainians want to find a format that would be compatible… but it would be impossible to agree on a single customs tariff because they are absolutely bound” by the EU free trade deal.

The worries over the possible trade war between Ukraine and Russia rose after Russian President Vladimir Putin said recently that Russia will resort to sweeping restrictions against Ukrainian goods if Kiev signs a free trade and political association agreements with the European Union.

The protectionist rhetoric came only days after Russia lifted its restriction imposed against Ukrainian goods last week.

The restrictions, which amounted to a de-facto blockade of the Ukrainian goods at the border, were politically motivated to prevent Ukraine from signing the agreements with the EU in November, Ukrainian politicians said.

Putin’s comments echoed those recently made by his chief trade advisor, Sergei Glaziev, that Moscow will implement tougher trade sanctions if Ukraine makes “suicidal” move to sign the EU agreements.

Moscow has been persistently encouraging Kiev to drop the EU agreements and instead to join the Customs Union, a Russia-led trade bloc that also includes Kazakhstan and Belarus.

The European Union called it “unacceptable” for Russia to economically threaten Ukraine, linking the threat with a possible signature of the association agreement with the EU.

Source: Ukrainian Journal


Igor Skakovsky said…
Ukraine must continue to stand for its National interest, continue to work with Russia and EU on finding solutions. If there is a willingness on Russian side to except the reality of Ukraine making it own decisions, in particular association with EU, problems with EU products crossing in to Russia can be solved. As with time Ukrainian average income could rise and living standards improve and country live by law!!! Ukraine will be come more attractive for its own people and may attract intellectuals from Russia to relocate.