UPDATE 2-Kyiv "ready to pay price" after Russia curbs trade ties over EU deal


* Russia says EU-Ukraine pact harms its economic security

* Putin orders suspension of Russia-Ukraine free trade zone

* Ukraine leader wants new pact to take effect from Jan 1

(Recasts with Poroshenko in Brussels)

By Vladimir Soldatkin and Gabriela Baczynska

MOSCOW/BRUSSELS, Dec 16 Ukraine is “ready to pay
the price” for a trade deal with the European Union, President
Petro Poroshenko said on Wednesday after Moscow moved to
restrict its own trade ties with Kyiv over the accord that is
due to take effect on Jan.1.

Controversy over the EU-Ukraine trade deal was the initial
trigger of unrest in Kyiv that culminated in the ousting of a
Moscow-allied president in 2014. Russia then annexed Crimea and
backed a separatist revolt in eastern Ukraine in moves that led
to Moscow’s worst standoff with the West in decades.

As Poroshenko arrived in Brussels, Russian President
Vladimir Putin ordered his government to suspend a free trade
zone with Ukraine from Jan. 1, making good on Moscow’s threats
to retaliate if Kyiv presses ahead with closer EU ties.

“Ukraine is aware of these restrictions and the expected
damage to the Ukrainian economy. But we are ready to pay this
price for our freedom and our European choice,” Poroshenko said
in Brussels.

Russia has staunchly opposed the EU-Ukraine free trade pact,
saying it could lead to a flood of European imports across its
own borders and damage the competitiveness of Russian exports to
Ukraine.

Putin’s decision to suspend a 2011 free trade deal with
Ukraine was set out in a decree which cited “extraordinary
circumstances affecting the interests and economic security” of
Russia. It made no mention of how long the free trade regime
would be suspended.

Poroshenko, speaking alongside European Council President
Donald Tusk and European Commission President Jean-Claude
Juncker, said the trade accord with the EU would be implemented
in full as planned on Jan.1 and would not be delayed.

Juncker said a meeting planned on Monday in Brussels between
the Commission’s trade team and Ukrainian and Russian ministers
on the trade agreement would still go ahead and was the “last
chance” to overcome Moscow’s opposition to the accord.

The 28-nation EU is also due to extend economic sanctions
against Moscow this week over the unrest in east Ukraine, where
it blames Russia for driving the rebellion and where more than
9,000 people have been killed in fighting.

But, as some EU member states are seeking to reengage with
Russia to tackle the crisis in Syria and the related threat of
terrorist attacks, Poroshenko was received in Brussels by Tusk
and Juncker rather than by all 28 national leaders.

The three men will also discuss easing visa restrictions for
Ukrainians travelling to the EU.

Tusk, a former Polish prime minister, said he hoped they
could resolve outstanding issues regarding the visa regime on
Wednesday. Poroshenko said he wanted to see the new rules come
into effect next year.

(Reporting by Vladimir Soldatkin in Moscow, Gabriela Baczynska
in Brussels and Alessandra Prentice in Kyiv; Editing by Gareth
Jones)