Russia laid out a long list of demands for amending a sweeping trade deal between Ukraine and the European Union a month before the pact is due to be fully implemented.

The new demands came at a fresh round of discussions among the three sides aimed at mitigating Russian concerns about the deal. But with no breakthrough on Tuesday after 17 months of talks, hopes are fading that a compromise can be found.

Brussels set up the three-way talks in July 2014 as a bid to ease tensions between Kiev and Moscow after the annexation of Crimea and the start of the conflict in eastern Ukraine. The EU hopes an agreement on steps to tackle the concerns will prevent Moscow retaliating against Ukraine when Brussels and Kiev fully implement the accord on Jan. 1.

The EU has said that the discussions don't give Russia any veto over its bilateral pact with Ukraine. Still, European officials say that if the three sides can find practical solutions to prevent Russian firms losing out, they should do so.

Despite 18 rounds of talks, though, EU and Ukrainian officials charge that Moscow has never raised specific concerns about the pact that the two sides could realistically address. Russia continues to warn it will broaden trade penalties against Kiev if the full deal goes ahead next month.

EU Trade Commissioner Cecilia Malmströ m cited some progress in Tuesday's talks, in particular that Russia for the first time accepted using an EU draft of possible solutions to its concerns as the basis for talks. "They still have some political problems" with the agreement, she said. "But I think they are starting to move to discuss the more concrete issues."

However, she said Russia unexpectedly came to the meeting with a "very, very long" list of proposed amendments, some that were unacceptable, but some that could allow for technical solutions. It wasn't immediately clear what was on the list.

"I think we can find common language on most of them," she told reporters after the meeting.

Ukrainian Foreign Minister Pavlo Klimkin said the Russian side presented a mix of new and old demands. "Some proposals are for us clearly unacceptable," he said.

"We agreed to continue working at the expert level and at the ministerial level, but because there is not much time left, some kind of extraordinary measures will be necessary to reach an agreement," Russian Economics Minister Alexey Ulyukaev said in comments published by Interfax news agency.

Russia has raised a broad range of concerns about the pact. It contends that the agreement could create nontariff barriers to Ukraine-Russia trade, undercut Russian food-standard rules and sever links between critical defense and other industries in Russia and east Ukraine.

The EU and Ukraine have both said they wouldn't amend the signed pact directly, a step that would force all EU member states and Ukraine to ratify the agreement anew. However, they have said they can use the flexibility in the agreement, for example giving Ukraine longer to adjust to higher EU regulatory standards for products, which would also give Russian firms more time to adjust.

The EU has already slashed tariffs for Ukrainian goods but in September 2014, it gave Kiev until Jan. 1 to cut its own tariffs for EU goods and fully implement its side of the deal. Ukrainian and EU officials reiterated on Tuesday that deadline will be met.

As talks have continued and the conflict has dragged on in eastern Ukraine between the Kiev government and pro-Russian rebels, bilateral trade has plummeted.

The Ukrainian government says that trade with Russia fell 58% in dollar terms in the first half of 2015 compared with a year earlier.

Russia has banned certain produce from Ukraine including vegetables and cheese made at specific factories. Moscow said last month it planned to expand the ban to all Ukrainian produce by January 2016.

Ms. Malmströ m said there could be fresh technical talks next week and pledged that Brussels was open to further discussions after Jan. 1 if Russia's concerns persisted. But she warned that would happen only if Moscow refrained from new trade penalties on its neighbor.

Write to Laurence Norman at laurence.norman@wsj.com

 

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(END) Dow Jones Newswires

December 01, 2015 23:35 ET (04:35 GMT)

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