The agreement between Israel and Ukraine will not prevent the EEU to enter into FTA agreement with Israel

Moscow. December 22. The agreement on free trade area (FTA) between Israel and Ukraine should not affect the negotiations on FTA with Israel the Eurasian economic Union (EEU), said the representative of the Eurasian economic Commission (the EEC is a supranational body to regulate EEU).

“We will examine the terms of the agreement Ukraine – Israel, but first we can assume that our negotiations should not affect”, – said the Agency interlocutor.

The representative of the EEC explained that initially the agreement on the CIS free trade area in 2011 was created as very liberal: the only exemptions from was sugar. So it was signed and Annex to the document under which the free trade regime can limit against a party who will change its trade regime with a third country thus, creating the potential for the markets of other participants in the CIS free trade area.

Thus, while negotiations with Israel, Eurasian economic Union will defend its interests, based on an existing set of free trade agreements in Israel, and therefore to approach the list of exemptions, rules of origin and other standards.

“And plays the role of the geographical factor: the gains from circumvention of customs duties on gray deliveries of goods to the EU through Israel and under the Israeli view may not cover the cost of logistics, while the transit through Ukraine cheap and fast”, – told in the EEC.

Finally, according to the representative of the Commission, necessary to take into account the economic situation in partner countries. “The motivation of the Israeli entrepreneurs to take on grey schemes, the risk is much lower than Ukrainian, which is in deep crisis and under pressure from manufacturers and EU standards for its own market. Again, the existing negative practice speaks in favor of the fact that Ukrainian entrepreneurs will use various “grey” schemes”, – concluded the source.

Earlier it was reported that the state Duma on Tuesday adopted initiated by the President of the Russian Federation the law on the suspension of the Treaty on free trade zone (FTZ) in respect of Ukraine. The deputies voted for this decision immediately in the first reading in General.

On 16 December President Vladimir Putin signed a decree on suspension from 1 January 2016, of the FTA agreement on Ukraine “in view of exceptional circumstances affecting the interests and economic security of the Russian Federation and require urgent measures”.

This decision is dictated by the fact that from 1 January 2016 will apply the trade and economic section of the Association Agreement between Ukraine and the European Union, without reaching a legally binding agreement that meets the interests of Russia, which means a fundamental change in the circumstances that were substantially important for Russia at the conclusion of the Treaty on the free trade zone, is marked in accompanying materials to the bill.

“Tariff liberalization under the agreement (EU-Ukraine), will significantly damage the Russian economy. In addition, the obligations of Ukraine on trade and economic section of the agreement in conflict with Ukraine’s obligations named in the contract, which provides for, along with duty-free trade commitments on a range of multilateral and bilateral agreements within the CIS”, – emphasized in the explanatory Memorandum.

“In the sphere of customs administration, we have identified the risks of re-export to Russia of European goods under the guise of Ukrainian, as well as significant growth of export of Ukrainian goods, squeezing the private market with goods from the EU, due to the weakening of cooperation between our customs services in connection with the transition of Ukraine to the European rules of conduct of customs”, – noted in turn, the first Deputy Minister of economic development Alexey Likhachev.

Also on Tuesday, the President of Ukraine Petro Poroshenko said that Ukraine and Israel plan in the first half of 2016 to sign the agreement on the FTA between the two countries.

“We have agreed to significantly accelerate the signing of the agreement on FTA between Ukraine and Israel, agreed that this should happen in the first half of next year”, – said Poroshenko after talks with the leadership of Israel on Tuesday.