Baltic States – CIS, EU – Baltic States, Legislation, Lithuania, Markets and Companies, Ukraine

Speaking about Russia’s threats of trade sanctions, Aivaras Abromavicius says that Ukraine is getting ready for the worst-case scenario, which may cost 600 million US dollars (EUR 566 mln) annually to the country’s business.

“The date of coming into force of this agreement will not be postponed: both Europe and Ukraine have firmly decided that this pact will enter into force on Jan. 1 and its text will not be amended. We’ve already held about 11 meetings and all of them basically proceed along the same lines hence we are not surprised about the stance of the Russians. But we think that it’s a wrong stance,” the minister said in an interview to BNS in Vilnius.

Kiev was getting ready for Russia to impose an embargo on a number of Ukrainians goods and to raise customs duties, which might cost up to 600 million US dollars to business, he said.

“It’s an absurd situation where we have a bilateral trade agreement and a third country interfering into it even though its interests in this case are absolutely unaffected. In any case, recent discussions with the Russians have shown that they rarely have a friendly approach to trade issues and their stance is often unpredictable. Hence we’re getting ready for the worst-case scenario. Several years ago, Russia accounted for one-third of Ukraine’s exports whereas now its share in Ukraine’s total exports is mere 12.4 percent,” Abromavicius said.

“According to our estimations, if they impose an embargo on some goods and raise customs duties on others, it would cost between 420 and 600 million US dollars in lost revenue to Ukraine’s producers,” he added.

The minister said that some businesses had already refocused towards Western markets but the sectors, which mainly exported to Russia, would need more time to find new markets.

Ukraine, the EU and Russia on Tuesday failed to find a compromise on the EU-Ukraine free trade pact, which would take effect in a month’s time.