Brussels, 13/02/2015 (Agence Europe) - On Friday 13 February, the European Commission confirmed that ministerial level consultations with Russia would resume in Brussels on 3 March as regards taking the impact of the EU-Ukraine free trade agreement into account for the Russian economy.
“We have agreed with European Commissioner for Trade Cecilia Malmström to meet in Brussels on 3 March to discuss the spectrum of our relations, including the issues related to applying the EU-Ukraine association agreement. We must find solutions on this point”, said Russia's minister for economic development, Alexei Ulyukayev, on Friday morning. “This meeting in Brussels has been planned for several days now, at Ulyukayev's request”, said Daniel Rosario, Malmström's spokesperson.
The resumption of the trilateral talks to find practical solutions to Russia's concerns about implementing the EU-Ukraine association agreement and its trade section are part of the peace agreement concluded between Germany, France, Russia and Ukraine in Minsk on 12 February to stop the hostilities in East Ukraine.
Under the terms of the trilateral compromise found between Russia, Ukraine and the EU on 12 September 2014, the European Commission agreed to postpone the provisional implementation of the EU-Ukraine free trade agreement until 1 January 2016, thus providing 15 months to find ways to respond to the Russian concerns, via trilateral consultations.
During this time, Ukraine continues to enjoy both the trade preferences granted it by the EU since the end of April 2014, and the preferential tariff scheme resulting from the free trade agreement of the Commonwealth of Independent States (Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Uzbekistan, Russia and Tajikistan).
The EU-Ukraine free trade agreement aims at eliminating 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 tariff removal on 94.7% of Ukrainian industrial products.
The tariff preferences scheme that the EU has been granting Ukraine since spring 2014, which consists of implementing certain provisions of the agreement, provides Ukraine with considerable reductions in European customs duties on its exports. The Commission calculates that Ukraine saves €500 million per year as a result of these reductions. Establishing a free trade area would bring the Ukrainian economy gains of between €1 billion and €1.5 billion per year.
Russia highlights “systemic issues” resulting from this agreement and claims the agreement should be rewritten. Russia fears the arrival of European products on its market via Ukraine - to the detriment of Russia's national production. In addition, Russia does not believe that Ukraine should benefit from privileged trade conditions with both Russia and the EU. The Russian concerns are about tariffs, standards and technical regulation, veterinary and phytosanitary standards, energy and customs regulations. Moscow has asked for over 2,000 amendments to the agreement. (Emmanuel Hagry)