ASTANA, Sept. 25 – Prime Minister Mykola Azarov on Wednesday suggested using rules and regulations of the World Trade Organization to prevent an escalation of a trade dispute with Russia later this year.

Russia warned it would restrict imports of Ukrainian goods if the country signs a political association and free trade agreements with the European Union in November.

Russia is worried it will be flooded by European goods if Ukraine removes import duties with the EU under agreements.

“I noted that the WTO rules that Russia and Ukraine adhere to provide ample opportunities for adjusting either possible re-exports or many other problems that the Russian party is talking about right now,” Azarov said in Astana. "We started very difficult, complicated process, but I'm sure that if there is a good will any issue can be resolved.”

“I suggest moving from general considerations of what causes problems and what doesn’t to practical considerations of issues that worry our Russian partners,” Azarov said. “I am for trying to find common ground and to respond to real threats, as there are any, not hypothetical ones.”

Russian officials, including Sergei Glazyev, a trade advisor to Russian President Vladimir Putin, said recently that Ukraine will face financial catastrophe and default if its goes ahead with signing the EU agreements.

But Russian Prime Minister Dmitry Medvedev on Wednesday toned down his rhetoric.

“There will be no catastrophe if the agreements are signed,” Medvedev said. “We will continue to cooperate, but the volume of economic cooperation will be narrowing.”

He also said that Ukraine can keep its position as an observer at the Customs Union, a Russia-led trade bloc, although the position will not help much.

“Once Ukraine signs the agreements with the EU it will de-jure and de-facto will close opportunities for cooperation with the Customs Union,” Medvedev said. “But, of course, they can keep the observer status.”

Moscow's efforts to persuade Kiev not to move closer to the EU form part of a broader drive by Russia to deter former Soviet allies from edging out of its orbit and moving their economy and future trade towards western Europe.

The 28-nation EU, which includes eastern European countries that were for decades under Soviet control, has made clear it will not give in to what it called Russian attempts to limit the "sovereign choices" of Ukraine and other countries.

Kiev still has one potential obstacle to overcome before any deals are signed with the EU - it has not bowed to pressure to release former prime minister Yulia Tymoshenko, a political rival of President Viktor Yanukovych who was jailed for abuse of office and is seen by the EU as a victim of "selective justice." (tl/ez)