I/III. http://www.themoscowtimes.com/news/article/eu-association-agreements-not-seen-as-threat-to-russian-economy/502590.html EU Association Agreements Not Seen as Threat to Russian Economy
- By Gabrielle Tétrault-Farber <http://www.themoscowtimes.com/sitemap/authors/482483.html> - Jun. 26 2014 20:16 - Last edited 20:17 Ukraine's President Petro Poroshenko addresses the Parliamentary Assembly of the Council of Europe in Strasbourg. With Ukraine, Georgia and Moldova set to sign the economic sections of association agreements with the European Union on Friday, analysts say the deals will have minimal impact on the Russian economy but will further broaden the political schism between Russia and its neighbors. Russia should not lose more than 1 billion euros in the next few years as a result of Ukraine's signing of the EU deal, according to one Russian economist. The agreements' greater impact on Russia, analysts said, is their erosion of Russia's informal influence in former Soviet republics. "Current and former CIS countries have a clear choice: Either they join the Eurasian Economic Union with Russia, or associate themselves with the European Union," said Alexei Makarkin, deputy director of the Center of Political Technologies think tank in Moscow. "Russia will react negatively to these signings not because of their economic nature, but because it views this as European expansionism into its traditional sphere of influence," he said. Plans for Protectionism Russia has repeatedly expressed its disapproval of the agreements, claiming that European goods could flood onto the Russian market via Ukraine, Moldova and Georgia, hurting domestic producers. Russia is currently participating in bilateral consultations with the EU about the effects of Ukraine's deal on the Russian economy. A statement released on the website of the European Commission earlier this month said that the Commission's president, Jose Manuel Barroso, had offered President Vladimir Putin the chance to continue political consultations about the effects of Ukraine's association agreement with the EU "as a way to dispel any concerns." First Deputy Prime Minister Igor Shuvalov told reporters this week that the government would take measures to protect the domestic market if Kiev signs the Association Agreement, even without the consent of Belarus and Kazakhstan, Russia's partners in the newly created Eurasian Economic Union. Although analysts conceded that the influx of European goods might be a legitimate concern, they said that Moscow's indignation at the EU Association Agreements conceals apprehension about European influence in its backyard. "The economic sections of the EU Association Agreements are first and foremost political," said Dmitry Bolkunets, an economist at Moscow's Higher School of Economics. "This agreement is about the European projects of former Soviet republics, of which Russia does not approve. This is about the ability of Ukraine and other former Soviet republics to engage in independent policy-making. Economics is a secondary concern here." A Drop in the Ocean The signing of the EU Association Agreements by Georgia and Moldova -- countries that each account for less than 0.25 percent of Russia's imports and exports -- will have no impact on the Russian economy, according to observers. "Georgia's economy is something like 140 times smaller than Russia's," said Andrei Suzdaltsev, a deputy dean at the faculty of world economy and international affairs at the Higher School of Economics in Moscow. "From an economic point of view, the signing of an EU association agreement with Georgia and Moldova is not problematic for Russia. The bigger bone of contention here is Ukraine, which is acting like a woman who wants to marry two men [Russia and the EU]," he said. Ukraine: Odd One Out? Ukraine's 11th-hour decision last November to postpone signing the EU association agreement served as a catalyst for regime change in the country, sparking massive street protests in Kiev and culminating in the ousting of President Viktor Yanukovych. The popular reaction to Yanukovych's reluctance to sign the deal -- a decision Russian authorities hailed as a wise economic choice -- demonstrated the existence of broader political issues at the heart of the agreement. Kiev is one of Moscow's key trading partners. In 2012, 5.2 percent of Russian exports went to Ukraine, making it the fourth biggest market for Russian exports, according to the European Commission's Directorate-General for Trade. Ukrainian goods -- consisting mostly of machinery, equipment and metal products -- accounted for 5.7 percent of all imports to Russia. For Ukraine, those percentages are significantly higher: The same year, 32.4 percent of Ukraine's total imports came from the Russian market and Russia was the destination of 25.6 percent of the country's exports. Despite the volume of bilateral trade between Russia and Ukraine, economists believe that even Ukraine's EU agreement will have a marginal effect on the Russian economy. "Ukraine's eventual adoption of European standards might prevent certain Russian products from entering the Ukrainian market, including agricultural and other food products," said Alexander Knobel, director of the International Trade Research Center at the Russian Presidential Academy of National Economy and Public Administration. "But products from these sectors only represent a fraction of what Russia exports to Ukraine. Overall this agreement generates minimal losses for Russia," he said. Advice From Allies According to Knobel, the long-term effects of the EU association agreements will depend on how Russia chooses to impose trade barriers on the former Soviet republics and whether its Customs Union partners are able to influence its decisions. Eurasian Economic Union members Belarus and Kazakhstan, whose traditional support for Russia has been rattled by the conflict in Ukraine, have the potential -- at least in theory -- to prevent Russia from imposing harsh trade barriers on Ukraine, Georgia and Moldova. "Russia would be undermining its own Customs Union if it protects its market from Ukrainian goods without the consent of Kazakhstan and Belarus, as [deputy Prime Minister Igor] Shuvalov said Russia would do," Knobel said. "This would undermine the raison d'etre of the Eurasian Economic Union. Belarus has already spoken against imposing trade barriers on Ukraine. Russia will have to listen to its partners." Between East and West Ukraine, Georgia and Moldova have all taken steps in recent years to distance themselves from Russia, both politically and economically. But the countries' inexorable historical and cultural ties to Russia often leave them oscillating between their European aspirations and Moscow's sphere of influence. All three former Soviet republics signing the EU Association Agreement on Friday were part of the Commonwealth of Independent States, or CIS, in 1991: Georgia and Moldova became full members of the organization while Ukraine opted to remain an associate member. In the aftermath of Russia's five-day war with Georgia in 2008 over the Georgian breakaway region of South Ossetia, Georgia withdrew from the CIS and intensified its rapprochement efforts with the West. In May, Ukraine's Foreign Ministry said the country would quit the CIS. While Moldova remains a member of the organization, Moldovan Foreign Minister Natalia Gherman said in April that the crisis in neighboring Ukraine had sparked a reevaluation of the CIS and that her country was aligning itself "very actively with European policies." The three former Soviet republics have also had to watch Moscow support separatist enclaves on their territory. Separatist movements in Moldova's Transdnestr republic, Ukraine's southeast and Georgia's breakaway regions of Abkhazia and South Ossetia have received Russia's blessing and support. In 2009, Ukraine, Georgia, Moldova and three other former Soviet republics joined the European Union's Eastern Partnership. The initiative has provided them with an institutionalized forum in which to engage in dialogue with the EU over trade issues and political association while steering clear of the contentious issue of accession to the union. The signing of the economic sections of EU association agreements is now viewed as another step to further widening the political schism between Russia and its former fellow Soviet republics. *(MT)* II/III. http://www.themoscowtimes.com/news/article/ukraines-poroshenko-hails-historic-eu-association-deal/502612.html Ukraine's Poroshenko Hails Historic EU Association Deal - Reuters - Jun. 27 2014 20:08 - Last edited 19:32 Ukraine's President Petro Poroshenko (C) poses with European Commission President Jose Manuel Barroso (L) and European Council President Herman Van Rompuy (R) at the EU Council in Brussels, Belgium. The European Union signed an historic free-trade pact with Ukraine on Friday and warned it could impose more sanctions on Moscow unless pro-Russian rebels act to wind down the crisis in the east of the country by Monday. Ukrainian President Petro Poroshenko came to Brussels to sign a far-reaching trade and political cooperation agreement with the EU that has been at the heart of months of deadly violence and upheaval in his country, drawing an immediate threat of "grave consequences" from Russia. Georgia and Moldova signed similar deals, holding out the prospect of deep economic integration and unfettered access to the EU's 500 million citizens, but alarming Moscow which is concerned about losing influence over former Soviet republics. EU leaders meeting in Brussels demanded that, by Monday, Ukrainian rebels agree to cease-fire verification arrangements, return border checkpoints to Kiev authorities, free hostages and launch serious talks on implementing Poroshenko's peace plan. EU governments "will assess the situation and, should it be required, adopt necessary decisions," the EU leaders said in a statement, adding they were ready to meet again at any time to adopt significant sanctions on Russia. If Ukrainian rebels do not de-escalate tensions, the EU may expand sanctions against Russia as early as next week, by targeting new people and companies with asset freezes, diplomats told Reuters. More than 60 names are already on the list. Although it has drawn up a list of hard-hitting economic sanctions against Russia, the EU still does not appear ready to deploy them because of fears among some member states of antagonizing their major energy supplier. "We are talking about possible sanctions against Russia but we do not have to introduce sanctions for the sake of sanctions. We do have a need for a dialogue. I hope this dialogue will take place and we will have a real cease-fire," Poroshenko told a news conference in Brussels. Poroshenko has drawn up a 15-point peace plan to defuse the crisis in eastern Ukraine, where hundreds of people have been killed in clashes between security forces and pro-Russian rebels. A week-long cease-fire is due to expire later Friday. Poroshenko said Friday that he would take a decision on extending a cease-fire in the east of the country when he returns to Kiev following an EU summit in Brussels. But, according to two EU diplomats, Poroshenko told the leaders of France and Germany that he was proposing to extend the cease-fire by 72 hours, coinciding with the EU's deadline. Ukraine, Georgia and Moldova have made clear their ultimate goal is EU entry but Brussels, under pressure from voters weary of further expansion, has made no promise it will allow them in. *Pact Revived* Ukraine's former pro-Moscow President Viktor Yanukovych turned his back on signing the EU agreement last November in favor of closer ties with Moscow, prompting months of street protests that eventually led to his fleeing the country. Soon afterwards, Russia annexed Ukraine's Crimea region, drawing outrage and sanctions from the U.S. and EU, and pro-Russian separatists began an uprising in eastern Ukraine. "Over the last months, Ukraine paid the highest possible price to make her European dreams come true," Poroshenko said, calling Friday's accord the most important day for his country since independence from the crumbling Soviet Union in 1991. Symbolically, he signed the agreement with the same pen that had been prepared for Yanukovych to sign the document last year. Russia's Deputy Foreign Minister Grigory Karasin immediately said the signing would have "grave consequences" for Ukraine, Interfax reported. Poroshenko urged the EU to reward Ukraine for its sacrifices by promising the country would be eligible for membership of the EU once it was ready. The pledge would "cost the EU nothing but would mean the world to my country," he said. Russia, which fought a war with Georgia in 2008, has met previous attempts by its neighbors to move closer to the EU with trade reprisals. EU officials fear it could happen again. EU officials say that, in diplomatic talks, Russia has threatened to withdraw the duty-free treatment that Ukraine currently benefits from as a member of the Commonwealth of Independent States, or CIS, free trade pact. One senior EU official called the Russian threat "deeply shocking" while another said such a move would violate the CIS agreement and World Trade Organisation rules. If Russia imposed customs duties, it would put at risk some of Ukraine's exports, which mainly consist of base metals, grains, machinery, equipment and processed food. Ukraine sends 24 percent of its exports to Russia, worth $15 billion a year. As part of the deal, the EU will insist that Ukraine meet its standards on human rights and democracy, fights corruption, strengthens the rule of law and reforms its economy. III. http://www.themoscowtimes.com/business/article/gazprom-head-threatens-restrictions-if-eu-sells-gas-back-to-ukraine/502655.html Gazprom Head Threatens 'Restrictions' If EU Sells Gas Back to Ukraine - Jun. 27 2014 20:30 - Last edited 20:31 Gazprom CEO Alexei Miller (L) attends a news conference after the annual general meeting (AGM) of the company's shareholders in Moscow. Gazprom head Alexei Miller said Friday that the state-owned gas giant could retaliate against European countries if they were to sell its gas back to Ukraine through large-scale reverse gas flows. "There is no physical reverse flow," Miller told journalists at a briefing, ITAR Tass reported. "But if we detect a reverse flow on gas-measuring stations in Europe, we may impose restrictions," Miller said. Moscow cut off supplies to Kiev in mid-June after Ukraine failed to meet a deadline to pay a $1.95 billion gas debt, despite extensive negotiations leading up to the deadline. In late April, Ukraine and Slovakia signed a reverse flow agreement that would make use of an old, unused pipeline to begin exporting 2 billion cubic meters, or bcm, to Kiev in October. Ukrainian energy officials have since proposed a plan to the EU Commission that would allow Ukraine to increase reverse flows via Slovakia to 30 bcm, Kommersant reported. According to a UralSib report published Thursday, Gazprom would lose nearly $3 billion in 2016 if the EU accepted the proposal. -- Peace Is Doable -- You received this message because you are subscribed to the Google Groups "Green Youth Movement" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send an email to [email protected]. Visit this group at http://groups.google.com/group/greenyouth. For more options, visit https://groups.google.com/d/optout.
