Talks With Russia on EU-Ukraine Trade Deal Fail to Reach Compromise
02 December 2015 - 4:50AM
Dow Jones News
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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