Russian reciprocal sanctions are to come into force from January 1st 2016. According to them, the country won't be allowed to import agricultural products, raw materials and food products made in Ukraine. The corresponding decree was signed today by Russian Prime Minister Dmitry Medvedev. It was also decided to introduce a most-favored regime instead of an agreement on the free trade zone with Ukraine.
According to the government, next year starting from January 1st import duties stipulated by the Common Customs Tariff EAEC, will be applied in respect of Ukraine. The most-favored regime will be extended to Ukraine without any exceptions. "All preferences are fading, no benefits anymore," Medvedev said at a meeting with his deputies.
Decisions were explained by the fact that Ukraine stated that since 2016 Ukraine implements the economic part of the Association Agreement with the EU. "In these circumstances, we need to protect our market and our producers, as well as prevent the importation under the guise of Ukrainian goods from other countries,'' Prime Minister said, adding that retaliatory economic measures will be imposed in respect of Ukraine from January 1st in connection with its accession to the anti-Russian sanctions by the European Union and the United States.
The head of the Department of Customs Law at the Speransky Russian Presidential Academy of National Economy and Public Administration (RANHiGS) Mikhail Stepanenko said in an interview with a correspondent of Vestnik Kavkaza that the introduction of the most-favored regime for trade relations between Russia and Ukraine means the abolition of the privileges that exist in the free trade zone.
"A free trade area implies mutual exemption from customs duties, freedom of movement and so on. However, a sticker regime was introduced. It involves only the non-use of double import duties. It means that the country does not use the most-favored regime, the base rate of customs duty recorded in a single EAEC tariff, is to be doubled. The most-favored regime does not imply the double rate, but it cancels all the privileges of the free trade area,'' the expert explained.
Professor of Russian foreign policy department of the National Security at RANHiGS Alexander Mikhailenko said that the introduction of the most favored regime for Ukraine means worsening of trade relations with Russia.
"Before that the regime of the free trade zone, customs tariffs between the two countries have been reset to zero. However, Ukraine begins implementation of the economic part of the Association Agreement with the EU since January 1st, that is why we protect our market and cancel this preferential solution. We cancel and move to general civilization of the most-favored regime that we use to trade with all European countries. But it is not preferential. The average, the most favored tariff is 6%. It means that 6% will be added to the price. But it depends on kind of goods. It will be not good for our trade, but it will be worse for Ukraine, which is highly dependent on the Russian market,'' the expert concluded.
