[160913.EN.BIZ] Russia To Bar Ukraine From Ex-Soviet Trading Bloc If It Signs EU Deal

RUSSIAN Prime Minister Dmitry Medvedev has warned Ukraine that it will bar it from joining the former Soviet bloc customs union if it joins the European Union free trade zone.

The Ukraine could no longer directly access the former Soviet market of Moscow-led Eurasian Customs Union of Russia, Belarus and Kazakhstan, that accounts for 60 per cent of Ukraine steel, chemical and grain exports.

"I don't want there to be any illusions," said Mr Medvedev of this "key political decision that the leadership of Ukraine is making".

Earlier attempts to coerce Ukraine into the customs union setup in 2010 as a tariff-free trade, was seen as a thinly veiled attempt to offer cheaper gas in return for control of its gas pipeline network, considered "humiliating" by Ukrainian President Viktor Yanukovich.

Russia began its offensive to derail pro-EU policy by carrying out extra customs checks on Ukrainian imports and is now considering to impose "protective" measures.

Russia's protective stance is an attempt to prevent the re-export of, mainly tariff-free, EU goods into Russia that threatens Russian-made goods.

A condition of the Ukraine signing an Association Agreement with the EU at the Eastern Partnership summit in Vilnius in late November involves democratic progress and freeing of jailed ex-prime minister Yulia Tymoshenko.

But the dispute has been criticised by Swedish Foreign Minister Carl Bildt as "economic warfare" which Russia has used on other countries seeking EU free-trade agreements such as Moldova. Russia has threatened to drive up costs for its gas supply with Moldova and break off its tense relations with breakaway territory Transdniestria.

Armenia has announced to its parliament a proposal to join the Eurasian Customs Union of Russia, Belarus, and Kazakhstan which will gain weight against growing EU cooperation.

Source : HKSG.