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Ukraine tells Russia to 'accept reality' of new trade deal with EU

Ukraine tells Russia to 'accept reality' of new trade deal with EU
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Ukraine’s prime minister, Mykola Azarov, has told Russia to accept its new trade relationship with the EU as a “reality”.

Moscow is angry at plans by Kiev to sign a new trade deal with the EU, and has been turning up the pressure on its neighbour.

One of the companies to have found itself caught up in a trade war between the two countries is Ukraine’s largest industrial chocolate maker, Roshen.

In Soviet times, the factory was named after Karl Marx; now a statue of Marx outside is the only reminder of a bygone era.

For the last month, Russia has blocked imports of Roshen’s chocolates, saying the quality is not up to scratch.

Director of Development, Eugene Vovchanovsky said they have no idea when business will resume: “We have just received some information from TV, newspapers etc ; but up till now we have not received any document with anything concrete and the products we are producing and supply to Russia. Anyway, we are prepared to an inspection of our factories, we are open to giving them any documentation that will be necessary.”

Volodymyr Fesenko, a political analyst at the PENTA centre believes his is not a typical trade war, but has specific targets.

“The attack is on the leaders of Ukrainian big business, people who play an important role in the Ukrainian economy, because they are the main lobbyists for European integration of Ukraine,” Fesenko said.

This trade row between the two biggest former Soviet countries has deepened the traditional divide in Ukraine between pro-Russian and pro-European Ukrainians.

Ukraine hopes to sign key agreements with the European Union in November, including one on free trade.

It marks a shift in its traditional close economic relationship with Russia.

However Russia remains a major trade partner for Ukraine – more than 60 percent of its exports go to the former Soviet market, with Russia, Belarus and Kazakhstan the most important.

Our correspondent in Ukraine, Sergio Cantone, said the threats from Moscow are making the EU more sympathetic to Ukraine: “This trade row that is hitting major Ukrainian companies and capital interests has softened the EU’s stance towards the conditions that Kiev must fulfill in order to sign the association agreement at the end of November.”