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Russia suspends free trade accord with Ukraine

Wednesday, 16 December 2015 6:57 PM [ Last Update: Wednesday, 16 December 2015 6:57 PM ]

Russian President Vladimir Putin ©AFP

Russia has suspended an agreement on a free trade zone with Ukraine starting from the New Year amid strained relations between Moscow and Kiev.

On Wednesday, Russian President Vladimir Putin signed a decree that orders a "halt" to the treaty as of January 1 "due to exceptional circumstances which impact the interests and economic security of the Russian Federation."

The decree, however, did not mention how long the free trade regime between the two neighbors would be suspended.

The free trade zone was set up between the former Soviet Union countries of the Commonwealth of Independent States -- comprising all ex-Soviet republics except the Baltic states and Georgia -- in October 2011.

Last month, Russian Economic Development Minister Aleksey Ulyukaev warned that Moscow will impose a food embargo on Ukraine from 2016 to protect the Russian market from the effects of the Association Agreement between Kiev and the European Union (EU).

Russia argues that the Kiev-EU deal, which is set to go into effect on January 1, could result in a flood of European imports across its borders and damage the competitiveness of Russian exports to Ukraine.

A political crisis erupted in Ukraine in November 2013 when the country’s then President Viktor Yanukovych refrained from signing the Association Agreement in favor of closer ties with Moscow.

The move sparked demonstrations that led to Yanukovych’s ouster and the rejoining of the black Sea Crimean peninsula to the Russian Federation.

Ukrainian tanks move near Mariupol, Donetsk region, eastern Ukraine, October 21, 2015. ©AP

The situation also degenerated into a conflict after Kiev dispatched troops to the eastern regions of Lugansk and Donetsk in April 2014 in an attempt to suppress pro-Moscow protests there.

Kiev, Washington and Brussels accuse Moscow of involvement in the chaotic situation in eastern Ukraine and have imposed a series of sanctions against Russia and pro-Russia figures. Moscow, however, rejects the accusation.

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