The Russian presidential decree on suspension of the Agreement on a Free Trade Area (FTA) with regard to Ukraine will come into force from January 1st, at the same time as the agreement on the FTA between Ukraine and the EU comes into force. However, as stated by the Economic Development Minister, Alexei Ulyukayev, Moscow will continue to look for opportunities "to return the issue to the positive plane." On Monday, Ulyukayev goes to Brussels, where this issue will be discussed. The next ministerial meeting of the Russia-Ukraine-EU tripartite consultations is planned to be held there, in the course of which practical solutions to Russian concerns about the implementation of the trade and economic part of the Association Agreement between Ukraine and the EU in various fields will be discussed.
At his big press conference Putin spoke about about why Moscow has been forced to make a decision no longer to work with Ukraine as a member of the CIS free trade zone: ‘’The EU leaders proposed and asked not to exclude Ukraine from the free trade area and not to deprive it of the trade preferences with Russia in the hope that we will conduct the negotiations in the EU-Russia-Ukraine trilateral format for a year and will make some changes in various forms, if not change the very agreement between Ukraine and Russia on the association with the EU, then at least there will be made some corrections with additional protocols, which remove our concerns and ensure our economic interests.We had asked them to meet in a trilateral format a hundred times before July. Only in July did the first contacts begin. They did not lead to anything, actually."
Russia has sought to maintain its economic relations with Ukraine, but in the Treaty of the FTA there are reciprocal preferences, zero tariffs. "Ukraine used GOST, TU, customs regulations, which we inherited from the past and were changing gradually, in its economic relations with Russia and other CIS countries. Ukraine is unilaterally exiting this mode and joining all the European rules. There, for example, it is written that all the products on the Ukrainian market should be subject to the technical standards and rules of the EU technical regulations. However, our products do not meet these requirements," Putin admitted.
It was proposed in the document that Ukraine has the right to leave these and those products for some time. "That is, it is not required, but is entitled to. That is, whether the country will do so or not is unclear. And for this, a sub-commission could be created to determine this, and it could not be created as well. And we are asked, this is directly recorded, Russia leaves all preferences. Business cannot be done in this way," Putin said.
According to him, Russia is not going to impose any kinds of sanctions against Ukraine: "We just move on to the most favored nation treatment in trade. That is, Ukraine cannot be placed in conditions worse than any other of our partners outside, but of course, there would be no privileges or preferences in trade between Ukraine and Russia until January 1st 2016 "
In practice, this means that the zero tariffs in trade between Russia and Ukraine are zero. And so the average weighted rate will be 6%. "We have strongly fought for this not to happen. But we have not been heard. But we will work in those conditions which have been formed," the Russian president said.
