Trade deal with Ukraine delayed until 2015.
The European Union, Russia and Ukraine agreed on Friday to delay the implementation of an EU-Ukraine free trade pact until the end of next year, EU Trade Commissioner Karel De Gucht said. Ukraine will continue to enjoy privileged access to the EU market until that date, he said, but it will not have to cut duties on imports from the EU in return. The move appears to be at least partly a concession to Russia, which fears the EU-Ukraine agreement will harm its industry.
Russia has been urging the EU to refrain from implementing the free-trade pact with Ukraine until its concerns over the agreement are addressed.
The EU-Ukraine free trade pact is the centrepiece of a wide-ranging political and trade agreement which has been at the heart of Ukraine’s political crisis over the last year. Moscow had threatened to introduce import tariffs on Ukrainian goods if Kiev went ahead with the planned trade agreement from Nov. 1.
Ukrainian President Petro Poroshenko had also asked the EU to consider allowing Kiev to delay reducing customs duty on EU exports coming into the Ukraine under the new pact, Interfax Ukraine news agency reported. Allowing EU products more cheaply into the Ukraine market could initially create problems for the weak economy there.
“We will delay the provisional application of the (free trade agreement) until Dec. 31 of next year,” De Gucht told a news conference after talks with Russian Economy Minister Alexei Ulyukayev and Ukrainian Foreign Minister Pavlo Klimkin.
The EU will extend temporary tariff cuts it granted to Ukrainian products earlier this year until the end of next year, De Gucht said. “The reason we are doing this .. is the very difficult economic situation in Ukraine. This is part and parcel of a comprehensive peace process in Ukraine.”
The move also created a breathing space of 15 months in which Russia, Ukraine and the EU would continue talks to try to meet Russian concerns over the EU-Ukraine trade pact, he said.
Under the agreement, Russia and Ukraine will continue to apply preferential trade treatment to each other’s products under a free trade agreement among countries of the Moscow-dominated Commonwealth of Independent States.
Russian news agencies quoted Ulyukayev as saying earlier on Friday that Russia would introduce import tariffs on Ukrainian goods from Nov. 1 if Kiev went ahead with the trade pact with the EU.
