Russia warns Ukraine over joining EU trade bloc


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–> Russian Prime Minister Dmitry Medvedev stepped up pressure on Ukraine on Monday to back down on plans to join an EU trade bloc, warning that Kyiv would be barred from a customs union of former Soviet states if it signs an agreement with Europe. Ukraine’s hopes of signing a free-trade pact and other agreements with the European Union at a summit in November have caused concern in Moscow, which aims to derail Ukraine’s pro-Europe policy and keep the country focused on the former Soviet bloc.

It has already warned that Kyiv would forfeit its special partner status with Russia if it goes ahead with signing the EU accords. Ukraine’s economy is heavily dependent on exports of steel, chemicals and grain, more than 60 percent of which go to the former Soviet market, with Russia, Belarus and Kazakhstan – all members of the Customs Union – the biggest markets.

“I don’t want there to be any illusions … Practically, for our Ukrainian partners, entry into the Customs Union will be closed,” Medvedev told his deputy premiers during a weekly meeting. “This is a key political decision that the leadership of Ukraine is making,” he said. Russia, which would like control of Ukraine’s gas pipeline network, has used the promise of much cheaper gas to try to coax Kyiv into the Customs Union, which was set up in 2010 and offers tariff-free trade between members. Ukrainian President Viktor Yanukovich dismissed the promise as “humiliating”.

Last month, Russia sounded a warning shot to Ukraine, conducting extra customs checks on Ukrainian imports over several days. Russian President Vladimir Putin has also spoken of possible “protective” measures by Moscow and its Customs Union allies. More than just losing geopolitical influence in the former Soviet region, Moscow is also concerned that Ukraine’s EU agreement could lead to the re-export of EU goods into Russia, mostly tariff-free, where they could threaten sales of Russian-made products. Swedish Foreign Minister Carl Bildt, speaking during a meeting of EU foreign ministers last week, criticised what he called Russia’s “economic warfare” against former Soviet countries that aim for closer trade ties with the European Union.

Copyright Reuters, 2013