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Ukraine exports 'blocked by Russia', trade tension mounts

15 August 2013, 14:07 CET
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(KIEV) - Ukraine is experiencing "difficulties" with its exports to Russia, the prime minister acknowledged on Thursday, amid growing tensions with Moscow over a Kremlin-led Customs Union.

Ukraine's employers' federation has already accused Russia of effectively blocking the import of Ukranian goods.

This was after Kiev needled the Kremlin by pushing ahead with its ambition to join the European Union and apparently rejecting membership of the customs union.

Russia already banned at the end of July the import of popular Ukrainian chocolate brand Roshen, a move seen by some analysts as warning to Kiev that it is risking a full scale trade war with Russia.

Ukrainian Prime Minister Mykola Azarov said the problems were linked to the Russian-led Customs Union of Russia, Belarus and Kazakhstan that Ukraine has so far refused to join.

"Now, there are some difficulties that are linked primarily with the formation and structuring of the Customs Union," Azarov told reporters.

In an apparent bid to downplay the conflict, he added: "But do not inflate these problems artificially."

But mining company Metinvest, owned by the richest pro-government Ukrainian businessman Rinat Akhmetov, has already said there is strongly increased control of its products on the Russian border.

Because of similar problems, one of the largest Ukrainian beer producers Obolon has now suspended shipments of its products to Russia.

Due to such actions of Russia, Ukraine could lose up to $2.5 billion (1.9 billion euros) in the second half of 2013, according to the Ukrainian federation of employers, led by pro-government tycoon Dmytro Firtash.

"Unfortunately, the problems were not limited to Roshen. This is shown by numerous complaints from companies about the problems at Russian customs in the last two weeks," it said.

Russia's ban on Roshen chocolate imports was announced one day after President Vladimir Putin made an official visit to Ukraine in July which saw him return to Moscow empty-handed.

During the visit, he called for better economic integration between Moscow and Kiev, but no news was announced regarding Ukraine's possible membership of the Customs Union.

"Unfortunately this situation once again proves that Russia speaks to its (former Soviet partners) using the language of force," said Vitaliy Kovalchuk of the UDAR opposition party.

Ukraine, which won independence from the Soviet Union in 1991, currently hopes to sign an Association Agreement with the European Union, the first step to membership, at a summit in Vilnius in November.


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