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Ukrainian PM calls on Moscow to avert trade war

28 August 2013 22:16 (UTC +04:00)

Baku-APA. Ukrainian Prime Minister Mykola Azarov said Wednesday Kiev and Moscow needed to work harder to avoid a trade row as the creation of new barriers would harm trade and economic relations between the two nations, APA reports quoting Xinhua.

"The whole world is changing, the global system of economic relations. It is futile to build a fence to protect yourself from changes using artifical barriers. First of all, it is harmful to the economy," Azarov told a government meeting.

Azarov said whatever the circumstances were, Kiev wanted to increase the volume and quality of trade with Russia, its biggest single trading partner, in the future.

"Drawing up new dividing lines is not in the interests of our peoples," said Azarov, who talked with Russian Prime Minister Dmitry Medvedev in Moscow on Monday in a bid to calm Russian concerns over trade.

Azarov said the Ukrainian government was ready to develop practical algorithms and mechanism of interaction with the Customs Union and in the future with the Eurasian Economic Union to avoid confrontation with the Kremlin.

He said Ukraine had accepted the creation of the Russia-led Customs Union on its borders and plans to upgrade it from January 2015.

"In the same way, after signing the Association Agreement with the EU, Ukraine will create a free trade zone with the EU. This also has to be inevitably accepted as a reality," he said, a signal that Kiev would whatsoever press ahead with its drive towards a new trade relationship with the European Union (EU).

The former Soviet republic is set to sign key agreements with the EU in Vilnius, Lithuania, in November, including one on free trade.

The imminent free trade deal between Kiev and the EU has got on Moscow's nerves as the Kremlin is worried that EU goods entering Ukraine, free of import duties, and then being re-exported to Russia would pose competition for Russian goods.

Last week, Russia stopped nearly 1,000 Ukrainian cargo cars at the border for laborious checks, saying those actions were " preventative measures" in preparation for changes in customs procedures if Kiev signs the pact with the EU at a summit in Vilnius, Lithuania, in November.

Ukrainian experts see Russia's move as a tactic to press Kiev to abandon plans on closer EU integration and instead join the Russia-led Customs Union, which also includes Belarus and Kazakhstan.