Ukraine's transition to EU trade will cost €165bnStaff writer ▼ | August 28, 2014
Switching over to EU trade standards and nixing duty-free trade with Russia will cost Ukraine €165 billion over the next 10 years, President Putin warned at a meeting with President Petro Poroshenko in Minsk.
Consequences Russian President Vladimir Putin
"In full accordance with the terms of agreement with the CIS free trade zone and WTO standards, we will be forced to cancel preferential imports from Ukraine," Mr. Putin said.
Russia will cancel its duty-free relationship with Ukraine, which will lead to import tariffs of up to 8 percent affecting 98 percent of commodities.
Russia insists it needs to protect domestic markets from the flood of European goods on the Ukrainian market, which will in turn make Ukrainian goods less competitive. If the trade corridor of Ukraine is left wide open, Russian, Belarusian, and Kazakh products are at risk.
In response, Ukrainian President Petro Poroshenko said that he would like to establish a monitoring group to assess the actual damage of Ukraine’s association with the EU.
"Today we can agree to set up a monitMr. oring group that will assess real and not hypothetical potential damage," said Poroshenko. "After this damage is calculated we can put in protection mechanisms."
Moscow has warned Kiev that signing the Association Agreement (AA) with the EU would be economic suicide, and Moscow is also poised to suffer a €2 billion blow, according to Putin.
"Entire sectors of industry and agriculture business will be hugely impacted, and there will be negative implications on the pace of economic growth and employment," the Russian President said. ■