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Alexey Ulyukaev: Extraordinary efforts are needed to ensure that no commodity embargo and non-preferential trade regime will be established from 1 January 2016 in regard to Ukraine

02.12.15

On December 1, 2015, the Minister of Economic Development of the Russian Federation took part in the tripartite consultations between Russia, the EU and Ukraine. According to him, the negotiations did not lead to achieving the necessary arrangements, and they instructed the experts to try to find within a month an acceptable solution to remove Russian concerns because of the association between the EU and Ukraine, but "we need extraordinary efforts" to ensure that no commodity embargo and non-preferential trade regime will be established from 1 January 2016 in regard to Ukraine.

He noted that the introduction of commodity embargo towards Ukraine is not connected with the theme of the association, and but with the fact that Ukraine had joined the sanctions against Russia.

According to him, the proposals expressed the EU's to ease Russian concerns are unacceptable for Russia, and the Russian proposals have been taken into account only partially and it is not enough.

"Today’s discussion was quite positive. And if this conversation, and the positions we have achieved in understanding, took place a year ago, I would think that we are moving well. But since we have a month left, then, of course, the situation remains a cause for concern," - he said after a tripartite consultation.

"We considered several options for a possible agreement. From our point of view that was prepared by the colleagues from the EU is unacceptable, primarily for the reason that these documents are not legally binding and consist in the statement of the willingness of the parties to seek solutions to problems as the actual damage will be identified. But we say that it is too late to solve the problem when the damage has already appeared. We need to create a situation that will not allow this damage to appear. So we're talking about that we need to formulate a legally binding structure, where each party would have its obligations", - he explained the essence of the negotiations.

The head of the Russian economic agency noted that the Association agreement between Ukraine and the EU effective from 1 January effect implies a fundamental change of the legal field. "And the extent of the commitments made by Ukraine to Russia in our bilateral and multilateral agreements within the CIS is reduced. They want from us to agree with the degree of reduction of obligations of our Ukrainian partners while maintaining our commitments in preferential trade with zero customs tariff. We believe that it is unjust and economically flawed. Therefore, we submitted our own proposals, our version of this document, which took into account a lot of things that suggest our European colleagues, but we also introduced a commitment mechanism - first, we agree on principles, and then we establish working groups that monitor and keep track of how these risks materialize or not materialize, and help in making decisions," - he said.

In addition, according to him, the Russian party proposed specific mechanisms, "which consist in the fact that the parties had a three-way system of information exchange in the customs area, allowing to track the origin of products and close opportunities for products from third countries to be qualified under preferential trade regime between Russia and Ukraine".

"We proposed maintaining a system of conformity certificates, with which now the Russian exporters are working on the Ukrainian market, and the parallel functioning of two systems of standards - European, which are being introduced by Ukraine, and which Ukraine must meet as part of the agreement of the CIS that they had a parallel circulation and entities would be able to choose. The same thing was offered in the field of sanitary and phytosanitary control,"-  the Minister explained.

He also said that the Russian party proposed to save in the field of energy the parallel operation of power systems of Ukraine and Russia, as well as the formulations that provide acceptable investment climate for Russian and Ukrainian companies - "the non-aggregation of it, the non-use of measures that discriminate investors."

"We agreed with many of our colleagues. Nevertheless, we still have no acceptable document, and we, in our joint statement following the meeting, authorized to continue the work of experts. We also agreed to continue work both at the expert and ministerial level, but because time is short, we need some extraordinary efforts to reach agreement", - said Alexey Ulyukaev.

"Nevertheless, we believe that the work will be done based on the project that we presented. Colleagues have taken an extra pause for consideration. But we all need to understand that they can study it as much as they like, but just after 1 January 2016 they will have to study it  in a different economic reality," - the Minister said.

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