Brussels, 08/09/2015 (Agence Europe) - While Russia, Ukraine and the EU agreed at a ministerial meeting on Monday 7 September to continue their three-way discussions on the technical level until October, the battle seems far from over. The discussions aim to respond to Russia's concerns about implementation of the free trade agreement (FTA) between the EU and Ukraine, which is due to come into force on 1 January 2016.
At the end of their meetings with European Commissioner for Trade Cecilia Malmström, Ukraine's Foreign Affairs Minister Pavlo Klimkin and Russia's Economic Development Minister Alexei Ulyukayev both admitted that it would be difficult to find an arrangement by the end of the year.
“We didn't receive any evidence underpinning the Russians' concerns”, said Klimkin. “1st January is the last date”, he said, although Russia wants the entry into force of the EU-Ukraine FTA to be postponed again. “This is a joint decision between the Commission and Ukraine”, said Klimkin.
On the Russian side, Ulyukayev said he thought the chances of reaching a compromise were “not very high”. He also warned that Moscow would impose trade restrictions on Ukraine if the free trade area started on 1 January 2016, and he threatened to extend the agro-food embargo to Ukraine that Russia has been imposing on the EU since summer 2014. The cost of this package of measures for Ukraine is estimated at €1.5 billion per year. Russia, for its part, estimates that the damage to its economy caused by the EU-Ukraine FTA would be 100 billion roubles per year - in other words, €1.3 billion at the current exchange rate.
Klimkin and Ulyukayev both recognised that the talks were stumbling on the three areas on which the three parties agreed to work after the trilateral compromise of 12 September 2014 (which enabled a 15-month postponement of the EU-Ukraine FTA): customs cooperation, technical barriers to trade, and sanitary and phytosanitary measures.
On Monday, Klimkin, Ulyukayev and Malmström asked their experts to continue the technical level work in order to prepare a plan of practical solutions by October, which will respond to Russia's concerns. All three will meet again for an update in November and “to enable a mutually agreed result before the end of the year”.
After the two working sessions at technical level in early June and early July, the Commission spoke in early August of “some progress” in the areas of technical regulation and customs, but it said that “difficulties remain” in the sanitary and phytosanitary field (see EUROPE 11383).
The trilateral consultations on the EU-Ukraine FTA are part of the Minsk peace agreement of 12 February. (Emmanuel Hagry)