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GISMETEO.RU
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Nation    

Ukraine's exports to Russia grind to halt
Journal Staff Report

KIEV, Aug. 14 – Ukraine’s exports to Russia, its biggest market, ground to a halt Wednesday after Moscow suddenly listed all the country’s exporters as posing unspecified risk, leading to heavy delays at the border.

The move comes a week after Russia banned imports of chocolate and pastries from the largest Ukrainian confectionary, alleging the presence of a toxic chemical.

Ukrainian politicians said the hostile moves amount to a trade war and are aimed at derailing Kiev’s plans for signing free trade and political association agreements with the European Union in November.

“This means only one thing: Russia has started a full-scale trade war against Ukraine,” Boris Kushniruk, the chief economist at the opposition People’s Rukh Party, said.

“The Kremlin’s backstage battle aimed at preventing Ukraine from signing the association agreement with the EU has moved into the open stage,” he said. “Looks like we will have a very stormy autumn. A la guerre comme a la guerre.”

Ukraine’s largest coal mining and steel company, Metinvest, which is a major exporter of large-diameter steel pipes to Gazprom, said Wednesday it was one of the targets.

The Russian customs service suspended Metinvest’s shipments demanding all cargo must be unloaded and checked by the service, with some samples to be sent to Moscow for further inspection that may take two months.

“A total re-weighting of cargo is underway. The Russian customs authorities in certain cases demanded sampling that disrupts the integrity of the metal shipment,” Metinvest said in a statement. “This all turns into serious financial losses for our company.”

Metinvest is owned by Rinat Akhmetov, the wealthiest Ukrainian and a long-time ally of President Viktor Yanukovych.

The Federation of Ukrainian Employers, led by Dmytro Firtash, a powerful Ukrainian billionaire and another ally of Yanukovych, said the country’s Russian-bound shipments may be delayed for months.

The Russian customs authorities received early on Wednesday to list “all Ukrainian exporters without exceptions” as posing an unspecified risk, thus requiring the scrutiny, the federation said in a statement.

The federation urged Prime Minister Mykola Azarov to intervene as soon as possible to try to stop the escalation.

“The government is working on solving the problems that happen in mutual trade,” Vitaliy Lukianenko, a spokesman for Azarov, told Unian news agency. “The government is interested in removing all roadblocks for the sake of the economic growth.”

Meanwhile, a top Ukrainian government team, led by Agriculture Minister Mykola Prysiazhniuk, is expected to travel to Moscow on Friday for talks with the Russian authorities on a trade dispute over chocolate and pastries produced by Roshen.

Moscow earlier this month cited the presence of benzopyrene, a carcinogen, in the chocolate. The chemical is usually linked to lung cancer and is naturally emitted by forest fires and volcanic eruptions. It can also be found in coal tar, cigarette smoke, wood smoke, and burnt foods such as coffee.

But several countries, including Kazakhstan, Moldova and Kirgizstan, which had independently checked the Roshen chocolate, said there was nothing wrong with it, fueling speculations that Moscow’s ban was politically motivated.

Gennadi Onishchenko, the head of the Russian consumer protection agency that banned the imports of chocolates, said his agency will force the Ukrainian company to comply.

“One should not even try to organize resistance to Russia because one will fail,” Onishenko said, according to Interfax report. “One has to set down and talk to us.”

Russia has long suggested that Ukraine should quit its plans to have closer political association with the European Union and join a Moscow-led trade bloc, the Customs Union, instead.

The failure to join the bloc would lead to serious trade problem, Russian Prime Minister Dmitri Medvedev said earlier this year.

Volodymyr Oliynyk, a lawmaker and a spokesman for the ruling Regions Party, said Moscow has been resorting to ‘tools of the past century’ while trying to force Kiev to join the bloc.

“Friendship and mutual respect are not built on fear of losing something, but on gaining from communication and unification,” Oliynyk said. “Ukraine, however, is now being persuaded via uncivilized way with the use the tools of the past century.” (tl/ez)




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