DG has suspended the Treaty on free trade zone with Ukraine

DG has suspended the Treaty on free trade zone with Ukraine


MOSCOW, December 22. The state Duma adopted the law on the suspension from 1 January 2016 to the Treaty on the free trade area (FTA) with Ukraine.

The decision was supported unanimously.

“The law we adopted in connection with the economic part of the Association agreement between Ukraine and the EU to protect economic interests of the Russian Federation”, – said journalists the state Duma speaker Sergei Naryshkin.

Background

The President of the Russian Federation Vladimir Putin made on 17 December in the state Duma a draft Federal law “On suspending the Russian Federation of the Treaty on the free trade zone against Ukraine”. According to the explanatory Memorandum, provides for the suspension of preferential trade regime with Ukraine in order to prevent threats to the economic security of Russia.

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In accompanying documents it is noted that in connection with the application from 1 January 2016 the trade and economic section of the Association agreement between Ukraine and the European Union “has been a fundamental change of circumstances which were significant for Russia in the Contract”. “The Ukrainian side has actually refused development of trade and economic cooperation within the CIS and chose the path of progress towards a comprehensive integration with the European Union”, – stated in the explanatory Memorandum. It is indicated that tariff liberalization under the integration agreement between Ukraine and EU, “will inflict considerable damage to the Russian economy”.

Also it says that the commitments of Ukraine on Association with the European Union contradict the provisions of the Treaty on the free trade zone in parts duty free. “This situation makes it necessary to take immediate action to suspend the Russian Federation of the agreement on Ukraine… It is in the interests and complies with the legislation of the Russian Federation”, – stated in the explanatory Memorandum.

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As stated by the head of Committee on CIS Affairs, Eurasian integration and relations with compatriots Leonid Slutsky, the law has a reversible action. “If the situation in Ukraine is normalized, and we believe that our relations will be restored, one of the first decisions in inter-state relations between Moscow and Kiev will be the decision on the resumption of FTA Agreement. But now we have to support the President’s decision,” said Slutsky.

Vladimir Putin signed a decree on the termination from January 1, 2016, of the agreement on free trade with Ukraine “due to exceptional circumstances affecting the interests and economic security of the Russian Federation and require urgent measures”. On total a press-conferences the head of state stressed that Russia is not going to impose on Kiev any sanctions, but in connection with the termination of the agreement on free trade zone with Ukraine, this country has no privileges and preferences. “We are moving on to the most favoured nation treatment in trade”, – said the President.