Brussels, 14/07/2014 (Agence Europe) - The tripartite EU-Russia-Ukraine ministerial meeting to discuss the effects on the Russian economy of the EU-Ukraine association agreement and the agreement's section on free trade was held in Brussels on 11 July. The meeting resulted in the launch of a consultation phase which will take place this summer. Russia will have to set out its concerns in detail by 20 July - before the experts from the three countries examine the Russian difficulties by 1 September. Another tripartite ministerial meeting between European Commissioner for Trade Karel De Gucht, Russia's Minister for Economic Development Alexei Ulyukayev and Ukraine's Foreign Affairs minister Pavlo Klimkin is scheduled for 12 September in Brussels.
Based on the preparatory work at their meeting, De Gucht, Ulyukayev and Klimkin agreed on Friday that “the liberalisation of trade under the EU-Ukraine association agreement (including a deep and comprehensive free-trade area) will modify the trade and investment conditions in the Ukrainian market”, as they said in their joint statement. “While the new trade arrangements are aimed at creating positive economic effects for all parties involved, their implementation could entail some potential economic risks between Russia and Ukraine, including for economic operators”, they state. “In order to deal with any such potential risks, and to create favourable conditions for the trade and economic relations”, the EU, Russia and Ukraine agreed to launch “a consultation mechanism” which will focus on the technical regulations, standards, customs procedures, conformity assessment procedures and sanitary and phytosanitary measures stemming from the implementation of the free-trade agreement between the EU and Ukraine (which was signed on 27 June). Russia will circulate a list of precise concerns and potential risks by 20 July.
Based on this list, bilateral consultations will be conducted at expert level in order to seek possible solutions to these concerns and potential risks. The experts will clarify which risks could be addressed bilaterally and in which cases the involvement of the EU would be needed. In such cases, EU experts would join the bilateral process.
The experts will try to find solutions for each of the concerns and possible risks, and will identify the issues which need to be discussed at higher level. As part of this work, the experts will also clarify the urgency of the particular issues, taking into account the timelines foreseen in the EU-Ukraine association agreement. The experts will have to produce a preliminary report by 1 September - ahead of the ministerial meeting on 12 September, says the joint De Gucht, Ulyukayev and Klimkin statement.
“All parties confirm their readiness to engage in this process in good faith”, says the joint statement from this tripartite meeting, which was the result of a joint decision by Russian and Ukrainian presidents - Vladimir Putin and Petro Poroshenko respectively - to extend the bilateral consultations on the possible economic effects for Russia of the EU-Ukraine association agreement.
The EU-Ukraine free-trade agreement aims especially at removing most of the customs duties between the two economies - tariff liberalisation for 82.3% of Ukrainian agricultural products, preferences for 83.4% of Ukrainian exports of processed agricultural products, and the removal of tariffs on 94.7% of Ukrainian industrial products.
Russia fears the arrival on its market - via Ukraine - of products manufactured in the EU - to the detriment of Russia's national production, and it does not believe that Ukraine can benefit from privileged trade conditions both from Russia and from the EU. The deterioration of relations between Ukraine and Russia over recent years has brought about a large fall in their bilateral trade. Russia and the EU each represent nearly 25% of Ukraine's trade. Russia is a very important outlet - especially for the heavy industry (metallurgy, chemicals, aeronautics and defence) of the Russian-speaking east of Ukraine - an area which is currently in the throes of insurrection. (EH)