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Russia weighing tougher Ukraine sanctions
Journal Staff Report

KIEV, Aug. 18 Russia may impose tougher trade sanctions against Ukraine should Kiev make the suicidal move to sign free trade and political association agreements with the European Union, an aide to Russian President Vladimir Putin said Sunday.

Sergei Glaziev, who advises Putin on trade issues, said that last weeks suspension of Ukraines exports to Russia was only a one-shot deal to prepare for a bigger action.

Just in case we are preparing for stricter customs administration should Ukraine suddenly make this suicidal step to sign the association agreement with the EU, Glaziev said, Interfax reported.

Ukraine has been preparing to sign the free trade and political association deals with the EU at a summit in November. Moscow has been persistently encouraging Kiev to drop the idea and to join its Customs Union, a trade bloc with Kazakhstan and Belarus, instead.

The comment comes three days after Ukraines exports to Russia, its biggest single market, ground to a halt as Moscow had ordered its customs service to treat all Ukrainian shipments as posing unspecified risk.

Glazievs comment seems to confirm earlier allegations by Ukrainian politicians that Russias trade action was aimed at putting pressure on Ukraine to stop its closer relations with the EU.

This revelation suggests that the action was politically motivated and poses threat to economic stability in Europe. It may now become an issue that will be discussed by the EU in Brussels.

Swedish Foreign Minister said Thursday the trade restrictions imposed by Russia would be very serious matter if found that Moscow had been seeking to block Kievs relations with the EU.

Ukraines biggest exporters complained on Wednesday that Russian border guards had stopped their shipments for rigorous inspections, checks and sampling that may delay the shipments by up to two months.

President Viktor Yanukovych expressed his concerns over the measures in a phone call with Putin on Friday. Prime Minister Mykola Azarov spoke on the same issue with his Russian counterpart Dmitri Medvedev on Saturday.

The parties believe that the issue will be resolved quickly for the benefit of mutually beneficial bilateral cooperation, Azarovs press service reported after the phone call.

Azarov and Medvedev agreed that top customs service officials from both countries will meet on Monday and in a quiet mode will get customs procedures back to optimal regime that promotes mutual trade, the press service reported.

Ukraine and the EU may sign the agreements at the summit in Vilnius, Lithuania, but Brussels said Kiev should make progress with democracy and the rule of law.

Putin on a visit to Kiev last month told Yanukovych that Ukraine should join the Customs Union in order to stay competitive globally.

He earlier warned of unspecified trade problems for Ukrainian companies if Kiev decides to go ahead for the integration with the EU.

Glaziev said the action taken against the Ukrainian exporters on Wednesday was an attempt to prepare for operation in the event that Ukraine signed free trade and political association agreements with the EU.

In this case, he argued, Ukraine will be flooded with European goods that may find their way to Russia, unless Moscow takes steps to prevent it.

If Ukraine signs the association agreement with the EU it will be committed to blindly comply with all European regulations and standards letting European goods pass without any control that will displace Ukrainian goods, Glaziev said.

As a result, Ukraines imports from the EU will increase by $4 billion and may lead to Ukraine defaulting on its obligations, Glaziev said.

It will finally kill Ukrainian trade balance and Ukraine will default on its foreign trade and financial obligations, he said.

With no other way to go, Glaziev said, Ukraine will throw all its efforts to export goods to the Russian market, and thats why Russia will have to protect itself with the restrictions. (tl/ez)

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