UPDATE3: Putin suspends free trade deal with Ukraine, gas exempt
(Rewrites headline, adds details in first four paragraphs)
MOSCOW/KIEV, Dec 30 (PRIME) -- President Vladimir Putin has signed a law to suspend a free trade agreement (FTA) with Ukraine, making an exemption for Russian gas exports, as seen by PRIME on the single portal for legal data on Wednesday.
The agreement was signed by the CIS-countries and Ukraine on October 2011 and abandoned because the E.U. and Kiev will launch a free trade zone from January 1, 2016, and on the back of growing animosity between Moscow and Kiev.
Ukraine’s Deputy Economic Development and Trade Minister Natalya Mikolskaya said that the government approved suspension of a free trade agreement with Russia from January 2, 2016.
If Russia imposes no restrictions, Ukraine will also suspend no free trade regime, she said.
TWO RETALIATORY RULINGS AT ONCE
Ukrainian Prime Minister Arseny Yatsenyuk that the Ukrainian government will prohibit Russian imports and adjust customs duties for the country’s goods to retaliate for Moscow’s agricultural ban and suspension of a free trade agreement with the CIS.
“Today the government will adopt two rulings regarding counteractions to illegal actions of the Russian Federation. The first ruling prohibits imports of products from Russia to the customs area of Ukraine. And the second ruling is on import duties on products from Russia,” he said.
The rulings will be announced after the Russian restrictions come in force.
On Tuesday, Ukraine’s President Pyotr Poroshenko signed a law that allows the government to impose economic sanctions on Moscow in retaliation.
KIEV’S BAN NO THREAT
Russian First Deputy Economic Development Minister Alexei Likhachyov said in an interview with Rossiya 24 TV channel that if Kiev bans all agricultural imports from Russia, it will not incur significant losses to producers.
“If Ukraine fully stops Russian exports of agricultural products, in my point of view, it will have no fundamental consequences for Russian agricultural producers,” he said.
Russian Prime Minister Dmitry Medvedev said that Russia introduces customs duties on Ukrainian products and an agricultural ban on import from the country from January 1, while Kiev supports anti-Russian sanctions.
The Russian ban on Ukrainian agricultural imports is unlikely to speed up inflation significantly, Lukhachyov also said, adding that the share of Ukrainian imports on the Russian market for agricultural products is very small.
On December 16, President Vladimir Putin signed a decree to suspend a free trade agreement between the CIS and Ukraine from January 1, 2016.
UKRAINIAN TRANSIT FEARS
Ukraine’s Economic Development and Trade Ministry said in a statement the country expects Russia to restrict transit to the third countries from 2016.
“As part of changes in the trade and economic relations between Ukraine and the Russian Federation expected to come in force from January 1, 2016, we inform about a threat that the Russian Federation may limit transit of Ukraine-originated products through its territory to third countries (Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, China and other countries),” it said.
The authority also expects that Moscow will strengthen control over transit of Ukrainian goods, import of which is prohibited in Russia.
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