Le Monde. Trading battle of Kiev and Moscow

The entry into force of the Association Agreement between the EU and Ukraine today marks the beginning of a new trade war between Kiev and Moscow, writes Le Monde. Strategic and symbolic significance of this agreement strongly dislike Russia, despite the lack of mention of prospect of membership of Ukraine in EU. The Russian side was trying to delay or even revision of the agreement under the pretext that it encroaches on the interests and economic security of the Russian Federation, but ultimately chose a different path — the path of retaliation, the newspaper notes. December 16, 2015 President Putin signed a decree on suspension of the Treaty on the free trade zone in Ukraine, and on December 21, Prime Minister Medvedev announced to extend to Ukraine an embargo on the import of foodstuffs, which applies to member countries of the EU and other Western countries.

According to a source in the EU delegation in Kiev, «the Russian side’s motivation was purely political, and their arguments are very weak.» «The EU has already signed dozens of free trade agreements, and never had any problems with third countries. Moscow’s invitation to the negotiating table was already a favor — leads the publication the words of the diplomat, as if China were asked to Express their opinion about the transatlantic Treaty. Really embarrassing for Russia that Ukraine continues to get closer to Europe, and it buries hope for the possibility of its joining the Eurasian Union».

In response to Russian measures Kiev has imposed tariffs on Russian goods and the embargo not only on agricultural products but also beauty products, railway equipment and locomotives, the reporters.

«New trade skirmish is added to the gas conflict between the two countries, mutual boycott of the airline, the dispute over a debt of 2.8 billion euros, which Kiev refuses to return to Moscow. Not to mention the secret war going on in the East, where at the end of the year is increasingly violated the ceasefire,» continues the publication.

Embargo on the import of agricultural products will cost Ukraine about 600 million euros, an exception to the free trade zone with Russia — to 820 million euros. As a result, already begun, offset the scale of the Ukrainian economy towards cooperation in the West will become more clear, the article says.

«However, Kyiv has an ambitious goal, even if the agreement provides for financial support — several hundred thousand euros per year, coupled with loans provided by the IMF and the EU. Many heads of the enterprises concerned, foreseeing a future to face the European competition,» the newspaper States. «Part of the Ukrainian economy will suffer, it will be recognized in the EU, but rather from a lack of investment in the last two decades, and not from direct competition, which will affect the small percentage of products.»

As stressed According to Dragon Capital analyst Serhiy Fursa, the devaluation of the hryvnia only stimulates the national production oriented to export. «As for the embargo, Kazakhstan and Belarus refused to enter, said Fursa. Ukrainian products will get to Russia via their territories».

Translation InoPressa

Le Monde. Trading battle of Kiev and Moscow 05.01.2016

Январь 5th, 2016 by
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