UPDATE3: Putin decrees to suspend free-trade zone with Ukraine

(Adds minister’s comment in fifth paragraph)

MOSCOW/NAIROBI, Dec 16 (PRIME) -- President Vladimir Putin has signed a decree for Russia to suspend a CIS free-trade zone deal with Ukraine from 2016, as seen by PRIME in the decree published at the government’s Web site for disclosure of legal information on Wednesday.

“Due to the extraordinary circumstances that cover interests and economic safety of Russia and demand an urgent action, I decree…to suspend the free-trade zone agreement, signed in the city of St. Petersburg on October 18, 2011, regarding Ukraine from January 1, 2016,” the decree read.

Deputy Economic Development Minister Alexei Likhachyov said that the decree means an introduction of import duties on Ukrainian goods in the regime of most-favored-nation treatment. But Russia is still ready to discuss the problem with Ukraine.

“We are ready to work to the last. We are even ready to work after that, after January 1, 2016. We only need some steps toward us to be made,” Likhachyov said.

Economic Development Minister Alexei Ulyukayev also confirmed that the talks will not be suspended, and that he will attend the next Russia–Ukraine–E.U. ministerial meeting scheduled for December 21 in Brussels.

Ukraine’s trade representative Natalya Mikolskaya told reporters that the country hopes to reach an agreement with Russia on its association deal with the E.U. during the meeting and is ready to hold talks on a transition period to implement technical regulations.

“We hope that we will agree on something on December 21,” she said on the sidelines of a World Trade Organization’s conference.

Ukraine’s position is that Russia should provide grounds to all its concerns over the Brussels–Kiev free-trade zone, which will be in effect from January 1, 2016, and the concerns should not by hypothetical. Kiev is also ready to implement a transition period of two to three years to level technical regulations of the E.U. and the Eurasian Economic Union, she said.

At a previous ministerial meeting on December 1, the countries failed to agree and ease all Moscow’s concerns about the risks that the free-trade zone poses to its economy because of the CIS countries’ trade rules. Russian Economic Development Minister Ulyukayev said Moscow insisted on a legally binding agreement, but Ukraine said its conditions were unacceptable.

Ulyukayev also said earlier that if a compromise is not reached by 2016, Russia will have to impose import duties on Ukrainian goods.

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