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Loss of Russian market for Ukraine comes to $15 bln — Poroshenko

September 06, 16:28 UTC+3 KIEV
The Ukrainian president blames Russia for all the losses Ukraine suffered due to its shift in foreign policy
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Ukraine’s President Pyotr Poroshenko

Ukraine’s President Pyotr Poroshenko

© Mikhail Palinchak/Press Office of the President of Ukraine/TASS

KIEV, September 6. /TASS/. Ukraine’s losses from forfeiting the Russian market have totaled about $15 bln, which became a serious trial for the country’s economy, Ukraine’s President Pyotr Poroshenko told the parliament.

At the same time, Poroshenko blamed Russia for all the losses Ukraine suffered due to its shift in foreign policy.

"When Russia aggressively shut access to its market that became an economic shock for us. This economic aggression caused a sharp decline in the country’s standard of living," the Ukrainian president said.

"In recent years the volume of our exports to Russia declined fivefold," he added.

Earlier, according to Poroshenko, one-third of Ukrainian exports went to the Russian market, while now the share of exports to Russia is shrinking rapidly.

"At present the share of Ukrainian exports to Russia is 9% with the tendency for a further decline," he said.

Kiev continues to search for alternative markets of supply, the president said. According to him, the EU has become the chief alternative to the Russian market, as its share of exports to the EU has already reached 39.2%.

Shift in economic policy

On January 1, 2016, the agreement on free trade zone with the EU came into effect in Ukraine. According to Russia’s Foreign Ministry, Moscow had to take measures to prevent emerging risks to its economy and suspended its free trade agreement with Ukraine.

Prior to the free trade agreement being suspended, all Ukrainian goods - except sugar - had been shipped to Russia duty-free. But now the zero custom duties for European goods pose a risk to Moscow as goods imported to Ukraine could eventually end up uncontrollably spilling over into Russia.

In order to protect its producers, Russia also banned the import of agricultural products, raw materials and food from Ukraine on January 1, 2016. In a retaliatory move, Ukraine banned imports of 43 categories of goods from Russia.

Government statistics

According to Ukraine’s State Statistics Service, the volume of exports to Russia decreased by 38.3 % in 2016. Exports to the EU, despite the fact that in percentage terms it is constantly growing, also decreased. Now they account for about 40% of Ukraine’s total exports.

According to the Ukrainian Ministry of Economy and Development’s press service, exports to the EU cannot make up for the loss from discontinued trade relations with Russia - in the first 5 months of 2016 it dropped by 11.5%

Earlier, Ukraine’s Trade Representative Natalia Mykolskaya, acknowledged the unsatisfactory results of Ukrainian exports to the EU. According to her, Ukraine failed to obtain the export growth to the EU it had counted on.

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