Thursday

15th Nov 2018

Ukraine and Russia on path to trade war over EU pact

Ukraine and Russia are set to meet on Monday (19 August) to discuss a trade dispute which has seen Ukrainian products piling up on the Russian border for the past week.

An EU-Ukraine political and trade agreement, which may be signed in November, has reportedly triggered the spat, with one top aide to Russian President Vladimir Putin describing the upcoming EU deal as "suicidal" for Ukraine.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Ukraine president Viktor Yanukovich (r) is facing pressure from Moscow to join their trade bloc. (Photo: kremlin.ru)

“We are preparing to tighten customs procedures if suddenly Ukraine makes this suicidal step of signing the EU association agreement," said Sergei Glazev, who advises Putin on the Customs Union, a Moscow-led regional trade bloc, on Sunday.

The EU pact was first discussed in 2008 and is designed to integrate Ukraine into the EU’s political and economic sphere.

It includes, among other measures, provisions for stamping out corruption and putting an end to a system of selective justice, which has seen political opposition leaders sent to Ukrainian jails.

Ukraine already benefits from some preferential import tariffs, such as on machinery products, into the EU.

But similar products for the Russian market have been stuck at the border for several days.

Russian customs officers are preventing them from entering the country, incurring potentially massive losses for Ukraine-based companies.

Ukrainian steel producer Metinvest told the Financial Times that its products have been facing ever stricter border controls and delays since 13 August.

The Ukrainian Employers’ Federation says exports are being held up without explanation.

“De facto, there is a complete halt on Ukrainian exports. Actions of the Russian side could incur losses ... up to $2.5 billion in the second half of this year,” said the federation in a statement last week.

The group represents some 8,500 companies, which collectively account for 70 percent of Ukraine’s GDP.

For its part, Moscow last Friday denied that the customs measures are motivated by politics.

One Russian lawmaker said the delays are caused in part by Kiev’s refusal to join the Customs Union, composed of Russia, Belarus and Kazakhstan, but described them as being administrative in nature.

Meanwhile, Gennady Onishchenko, who heads Russia’s consumer rights agency, told Interfax: "We have a long and specific list of complaints ... relating to the protection of consumer rights."

He added: “If you want to call this a trade war, then call it a trade war."

Russia is one of Ukraine's largest trading partners.

Around a quarter its exports are shipped to Russia, while just over a third are shipped to the EU.

Putin warns Ukraine against EU pact

Russian President Vladimir Putin has warned Ukraine he will take "protective measures" if it signs an EU free trade pact.

News in Brief

  1. Full text of Brexit withdrawal agreement published
  2. UK cabinet agrees Brexit deal after marathon session
  3. Czechs join other EU states in rejecting UN migration pact
  4. EU Commission to give verdict on Italy budget next week
  5. EU's Tusk is Poland's most trusted politician
  6. Finland prepares to step in for Romania on EU presidency
  7. Trump threatens tariffs on EU wine
  8. US defence chief backs Nato amid 'EU army' calls

Opinion

Macron's 'European army': why is everyone talking about it?

Few people commented on one key point in Macron's statement: he did not justify the idea of a European army by the need to intervene in Africa, which would have been France's traditional approach. Instead, he invoked the Russian threat,

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Asylum for Macedonia's ex-PM put Orban on spot
  2. How the 'EU's Bank' fails to raise the bar on accountability
  3. Knives out on all sides for draft Brexit deal
  4. Romania data chief defends forcing press to reveal sources
  5. EU to review animal welfare strategy
  6. Macron's 'European army': why is everyone talking about it?
  7. Merkel calls for 'real, true' EU army
  8. Italy defiant on budget on eve of EU deadline

Join EUobserver

Support quality EU news

Join us