Association of Ukraine with the EU will bury the Customs Union
Moscow – Kyiv, June 24 (Navigator, Mikhail Shtamm) – Russia doesn't expect its Customs Union partners to support tariffs on Ukrainian goods after Ukraine's association with the EU, and will impose them alone, stated Russian First Deputy Prime Minister Igor Shuvalov. This would mean the end of the Customs Union, experts believe: after all, if goods from Ukraine flood through Belarus, tariffs will have to be imposed on it as well. And Belarus has no plans to change its trade rules with Ukraine.
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Yesterday a meeting of the Council of the Eurasian Economic Commission (EEC) took place in Sochi. The day before, RBC sources said that Russia, Belarus and Kazakhstan could agree on general measures of economic response to the signing of an association agreement by Ukraine. However, after the meeting, First Deputy Prime Minister Igor Shuvalov said that the decision to protect the national market would be made at the level of the Russian government, and not the EEC.
To protect itself, Russia can invoke Annex VI of the CIS Free Trade Area Agreement . Under this agreement, countries participating in the free trade area (which currently includes Ukraine) can impose non-zero customs duties on countries within the area if this results in a significant increase in the import of foreign goods across the border of one of the countries. In other words, Russia can raise tariffs on products from Belarus or Kazakhstan if it can prove that the goods are first imported from the EU to Ukraine and then from Ukraine enter the markets of Belarus and Kazakhstan. Non-zero tariffs cannot be higher than those the country agreed to upon joining the WTO.
Russian departments of the economic bloc, including the customs service, if Ukraine signs an agreement, will monitor the situation with incoming goods from the territory of the Customs Union countries and do not exclude the introduction of protective measures, a meeting participant told RBC
However, Russia’s decision to unilaterally establish non-zero duties and monitor goods from countries participating in the free trade zone calls into question the very idea of the existence of the Customs Union, says Vitaly Survillo, vice-president of Business Russia. “If we are talking about a single zone and if we refuse to check trade flows at the border within the Customs Union, then I can’t imagine how to implement what Shuvalov voiced without agreements with Kazakhstan and Belarus,” he said.
Previously, President of Belarus Alexander Lukashenko stated that he does not see any problems in cooperation between Ukraine and the EU, noting that the problem of Ukraine’s accession to the EU and cooperation with the Customs Union are too politicized.
Ukraine's Association with the EU Will Bury the Customs Union