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Ukraine and Russia trying to sort out economic differences

August 26, 2013, 11:04 UTC+3

The aim of the negotiations is to bring to Ukraine’s notice that it is about to make a crucial decision

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Russian-Ukrainian intergovernmental negotiations will be held in Moscow on Monday. The Russian delegation will be led by Prime Minister Dmitry Medvedev, and the Ukrainian delegation - by his Ukrainian counterpart Nikolai Azarov, the Vedomosti business newspaper reports on Monday.

In response to Ukraine’s bid to integrate in the European Union, Russia may restrict imports of Ukrainian agricultural and metallurgical products, the newspaper says.

The Russian delegation intends to warn the Ukrainian side about negative consequences for bilateral trade if Ukraine creates a zone of free trade with the European Union, the Vedomosti quotes Medvedev’s spokesperson Natalya Timakova as saying. At the same time a joint team of Russian and Ukrainian specialists works to calculate the aftermath of this step for Ukraine, she notes. Ukrainian prime minister’s spokesman Vitaly Lukyanenko said Ukraine was ready to discuss changes in the regime of trade with Russia.

Ukraine may sign an association agreement with the EU already in November. The agreement envisages flat taxes for 99% of products. Meanwhile, Ukrainian goods with the exception of white sugar are imported in Russia duty-free.

The aim of the negotiations is to bring to Ukraine’s notice that it is about to make a crucial decision and must be aware of all its consequences, an official from the Russian government staff says. These could be quantitative restrictions, the imposition of temporary taxes and other tariff decisions, as well as more complicated customs procedures.

Customs inspection of all Ukrainian products (the regime was in effect from August 14 to August 20) was a preventive measure, Russian president’s aide Sergei Glazyev said earlier. If the agreement between Ukraine and the EU comes into effect, Russia may immediately launch a thorough monitoring of imported Ukrainian products. On the basis of this monitoring, a decision will be made as to the imposition of safeguard actions for certain categories of products, as envisaged by WTO rules. These may be agricultural products as well as metallurgical and engineering products.

Ukraine may try to dispute these measures appealing to the World Trade Organization, but its chances won’t be high, Glazyev said.

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