Russia to set own barriers in EU pact

June 25, 2014 - 12:36:10 am

MOSCOW: With Ukraine set to sign a free trade pact with the European Union on Friday, Russia has said it is likely to respond with trade barriers without seeking approval from Belarus and Kazakhstan, its partners in a customs union.

Ukraine is due to sign the second part of its association agreement with the EU on June 27. The pact has been at the heart of the conflict between Russia and Ukraine since last year, when Moscow put pressure on Kiev to shun the EU in favour of joining its own Eurasian Economic Union. Ukraine’s Moscow-backed President Viktor Yanukovich agreed to do so and triggered an uprising that led in February to his own overthrow, swiftly followed by Russia’s annexation of Crimea and a pro-Russian separatist rebellion in eastern Ukraine.

“We have a possibility of imposing customs-tariff measures at Russian government level,” First Deputy Prime Minister Igor Shuvalov said.

Moscow fears that an influx of EU products into Ukraine will lead it to dump some of its own production in Russia. It is also concerned that Ukraine may re-export EU products into Russia, avoiding duties that Russia imposes to protect its own output.

Customs duties in Russia would put at risk some of Ukraine’s exports, which mainly consist of base metals, grains, machinery, equipment and processed food. Ukraine sends 24 percent of its exports to Russia, worth $15bn a year. Shuvalov did not say what kind of trade barriers were likely to be imposed, but said the move would not require approval from Belarus or Kazakhstan, raising the prospect that these could potentially re-export Ukrainian goods to Russia duty-free within the Eurasian Union.

Officials in Belarus and Kazakhstan were not immediately available for comment. Reuters

comments powered by Disqus