BREAKING NEWS

Russia, EU trade talks fail, Kiev set to face retaliation

By REUTERS

DECEMBER 21, 2015 20:01

BRUSSELS - The European Union failed to allay Russia's concerns about Ukraine's free-trade accord with the 28-nation bloc on Monday, leaving Kiev to face Russian retaliation through tighter bilateral trade rules from 2016.

Closer ties between Ukraine and the EU, including the free trade deal, were at the heart of a battle for influence between Brussels and Moscow in Russia's former satellite.

When the then-Ukrainian president, Viktor Yanukovich, ditched the accord in early 2014 under pressure from Russia, protests erupted on the street of Kiev leading to a crisis in which he fled power and a pro-Europe leadership took over.

The European Union and Ukraine delayed implementation of their trade deal by a year out of deference to Moscow's concerns that it could lead to a flood of European imports across its borders, damaging the competitiveness of Russian exports.

But comments by EU and Russian officials on Monday indicated that numerous meetings between the two sides to try to narrow differences and assuage Moscow's concerns had failed.

EU Trade Commissioner Cecilia Malmstrom raised doubts about the validity of the Russian concerns, saying some were "not real."

"We have been very open in listening to some of the concerns of Russia. Some of them we think are not real in economic terms. Some of them could potentially be real," Malmstrom told a news conference following final talks in Brussels.

Russian Economy Minister Alexei Ulyukayev, speaking in Brussels, said there was no deal and Moscow would scrap trade preferences dating back to 2011 for Ukraine as of 2016, when the bilateral EU-Ukraine deal will be implemented.

"An agreement has not been reached. We were left with our concerns on our own and we are forced to safeguard our economic interest unilaterally," Ulyukayev told reporters.

Such retaliatory action will mean that Ukrainian firms will pay duties to export to Russia, which says it needs to protect the competitiveness of its exports to Ukraine.

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