UPDATE2: Putin says Russia, Turkey abolish all trade restrictions

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BOCHAROV RUCHEI, Sochi, May 3 (PRIME) -- Russia and Turkey will abolish all trade restrictions between the countries, President Vladimir Putin said at a press conference following a meeting with his Turkish counterpart Recep Tayyip Erdogan on Wednesday.

“We have paid special attention to cooperation in the economic sphere and abolishing of restrictions and barriers that prevent expansion of trade and investment exchanges and covered the option of settlement of our accounts in the national currencies,” he said.

He added that all previously imposed mutual trade restrictions have been canceled.

“All limitations are harmful for the economy and for our producers,” Putin said.

In March, Turkey slapped a 130% duty on imports of Russian wheat, corn and other products cancelling the country’s duty-free regime. The market saw the step as an attempt to exert pressure as Russia is yet to unban imports of Turkish tomatoes and some fruit after an earlier conflict involving downing of a Russian Su-24 jet by Turkish air forces.

The only exception will be restrictions for tomato imports from Turkey and visa-free travels, he added.

“We have asked our Turkish friends and partners to understand that… our agricultural producers have taken substantial loans and credit resources, as (tomato production) has a long operating cycle in our climate conditions, connected with construction of greenhouses and so on,” he said, adding that the restrictions might be abolished after the investment cycle is over.

Deputy Prime Minister Arkady Dvorkovich said that tomato imports limitations may be maintained in the next three to five years, but they will be “flexible”.

“We have not worked out a mechanism yet, the restrictions will be kept anyway, our producers should not worry about it. Flexible mechanisms… may be introduced,” he said.

Putin also said that turnover between Russian and Turkey increased by 3% in the first months of this year.

Russia will invest U.S. $22 billion in the Turkey-based nuclear power plant Akkuyu, Putin said and added that the countries have agreed to form a $1 billion mutual investment fund soon.

Dvorkovich also said that grain exports restrictions will be canceled in the next few days and that the Federal Air Transport Agency will recall its notification about possible suspension of charter flights to Turkey as soon as possible.

He also added that Russia will allow employment of Turkish citizens and that the two states will simultaneously cancel phytosanitary limits in the coming weeks.

Dmitry Vostrikov, a director for development at the Association of Producers and Sellers of Food Products Rusprodsoyuz, said that the political decisions will strengthen competition on the Russian food market and may result in a decline in prices.

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