Agro Perspectiva

President Putin visits Ukraine

12.07.2012 18:22 "Agro Perspectiva" (Kyiv) — President Vladimir Putin begins his one-day visit to Ukraine. In Yalta the Russian head of state will take part in the 5th session of the Russian-Ukrainian Interstate Commission and will hold talks with his Ukrainian counterpart Viktor Yanukovych. On the agenda of the Russian-Ukrainian talks are the discussion of the earlier reached agreements that are currently being implemented and bilateral cooperation in various fields, including nuclear power production and the exploration of outer space. It is planned that paramount attention will be paid to the broadening of trade and economic contacts between Russia and Ukraine. Last year the trade turnover between the two countries topped 50 billion dollars. Ukraine ranks fourth among Russia’s main trade partners after China, Germany, and the Netherlands. The Kremlin does not rule out that Vladimir Putin and Viktor Yanukovych will discuss the gas issue too. However, there are no plans to sign any documents in this field, the Russian President’s aide Yuri Ushakov said. Kiev insists on the reconsideration of the Russian gas price which it finds slightly inflated. The Russian gas giant Gazprom finds no reason to reduce the price, saying that it is the market price. In response, Ukraine threatens to reduce gas purchases from Russia by half. This runs counter to the existing treaty, Moscow says, adding that there is a way out of the current deadlock — Ukraine’s active inclusion in the integration processes in the post-Soviet space. Meaning first of all Ukraine’s joining the Customs Union and the Single Economic Space of Russia, Belarus and Kazakhstan. Experts say that since customs duties on oil and gas are nonexistent in the above-mentioned structures, Ukraine will be able to save not less than 4.5 billion dollars annually. And this is exactly the discount Ukraine is asking for. If Ukraine accepts Russia’s proposal, it will rid itself of many problems, an expert from the Institute of the CIS States, Valentina Gaidenko, says. «Ukraine should change its course regarding its prospects for gaining membership in the Eurasian Union and in the Customs Union. Ukraine is a politically engaged country, and all its aspirations are concentrated on the European Union (EU). The point is that Ukraine is seeking to become an associate member of the European Union. Perhaps, the economic crisis in the EU states will enable Ukrainian politicians to more pragmatically assess the necessity to revitalize their country’s economy which is in a critical condition today.» Besides, Russia would like Ukraine to ratify the CIS Free Trade Agreement (FTA). Last October this document was signed by the heads of government of 8 CIS countries but Russia is the only country that has ratified it. Experts say that after this agreement comes into effect, its benefits will become evident. It will promote the increase of the trade turnover and the creation of new jobs, and besides, it will raise the competitiveness and the investment attractiveness of the national economies. Kiev also acknowledges the would-be advantages. However, Ukraine wants to have its own cake and eat it, General Director of the Effective Policy Foundation Kirill Tanayev says. «Presently, Ukraine is discussing the establishment of the free trade zone with the European Union and the setting up of a free trade area with the CIS states. These two processes are partly contradictory. As of today, Ukraine’s integration into the European Union has been frozen. That is why certain progress is possible in the issues concerning Ukraine’s participation in the free trade area with the CIS countries.» President Putin and Ukraine’s President Viktor Yanukovych also plan to discuss urgent international issues. Russia and Ukraine are expected to sign 12 documents on the results of the session of the Russian-Ukrainian Interstate Commission.