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GISMETEO.RU
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Nation    

Russia imposes new wave of trade barriers
Journal Staff Report

KIEV, July 14 – Russia imposed a new wave of trade restriction against Ukrainian goods ahead of a summit this month in what analysts see a desperate attempt to pressure Kiev to join a Moscow-led trade bloc.

The restrictions, affecting most Ukrainian meat and dairy producers, come after a warning from Russian Prime Minister Vladimir Putin that Kiev should abandon talks with the European Union over free trade agreement.

“Russia has been doing everything it can to disrupt the free trade agreement with the EU,” Yuriy Kostenko, the leader of the opposition Ukrainian People’s Party, said. “Obviously, Russia has decided to put economic pressure.”

Relations between Moscow and Kiev cooled earlier this year amid disagreements over trade issues. But the latest restrictions may have a negative impact on the meeting between President Viktor Yanukovych and his Russian counterpart Dmitry Medvedev later this month.

The developments come as Kiev has been making progress in negotiations with Brussels over signing the free trade agreement before the end of the year, according to Ukrainian officials familiar with the matter.

Putin and Medvedev have repeatedly told their Ukrainian counterparts this year that joining the EU free trade would prompt Moscow to respond with trade barriers prohibiting imports of Ukrainian goods to Russia.

The latest restrictions ban imports of meat and dairy products from 28 Ukrainian companies allegedly for failing to meet “veterinary and sanitation norms,” Rosselkhoznadzor, a Russian agriculture regulator, reported in a statement. Only three Ukrainian producers have been allowed to temporarily continue the exports.

The ban affects imports of Ukrainian meat and dairy products not only to Russia, but also to Kazakhstan and Belarus. The three countries make up the Customs Union, a trade bloc that Moscow has been courting Kiev for a more than a year to join.

“The situation is actually very simple,” Alexei Alekseyenko, an assistant head of Rosselkhoznadzor, told reported on Thursday in Moscow, Unian reported. “Many [Ukrainian] companies were not ready for a serious inspection.”

He said the Ukrainian companies were told of the problems and have time to fix them.

“I think that very soon, perhaps within a month, we will be able to resume the imports from many Ukrainian companies,” Alekseyenko said.

Meanwhile, the imposed restrictions is the harshest blow towards the Ukrainian meat and dairy industry since Moscow has slapped similar sanctions in 2006, apparently to punish Kiev for a pro-Western foreign policy course by then-President Viktor Yushchenko.

“Of course, this is a war,” Oleksandr Beskorovayniy, an economic observer at Unian news agency, said. “The trade war with political context. Russia is on attack. The goal is to make Ukraine join the Customs Union.”

The pressure on Ukraine has been rising persistently over the past six months, and follows earlier restrictions imposed on imports of sugar, buckwheat, potatoes and caramel.

Imports of caramel from Ukraine is now subject to a $300/metric ton duty beginning earlier this month, and is likely to shut down the Russian market for this product.

Ukraine has been most recently exporting 16,000 metric tons of caramel to Russia annually, down from 60,000 metric tons in 2004, according to the agriculture ministry. (tl/ez)




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