The Cabinet has confirmed that FTA agreement within the CIS will come into force on September 23. According to Premier Azarov, Ukraine has made a step in the ratification of the free trade area agreement within the CIS, though the introduction of Russia’s vehicle recycling tax, which affects the Ukrainian goods, clouds this event.

In his turn, National Security and Defense Council secretary Andriy Kliuyev declares that current FTA is very important for our country and will work for benefit of all CIS members. According to the official, in not very long-term prospective this agreement will allow to ramp up production of domestic industrial products by 3.5-4% annually, and GDP - by additional 2.5%. "FTA with CIS will not hamper the FTA agreement with the EU: both documents have been agreed. We are also holding talks on FTA with Canada, Israel, Morocco," Kliuyev specifies.

In general, the estimations of the agreement are controversial. Supporters of the agreement state that it will simplify the work of Ukrainian producers on CIS markets, while oppositionists complain it will open Russia all the doors to the Ukrainian market. Besides, it is still unclear whether FTA with CIS may affect integration process with the European Union.

As usual, ForUm has asked experts and MPs about true significance of the agreement for Ukrainian economy.

Oleksiy Plotnykov, chairman of the parliamentary subcommittee on international economic policy, MP from the Party of Regions, Doctor of Economics, professor and honored economist of Ukraine:

- My position on this agreement is well considered. Of course, this document does not cover all issues and has many exceptions. Besides, it does not solve the major question about energy carriers.
In general, though, it is positive for all enterprises, oriented to CIC markets. It will result in growth of jobs, producers' incomes and budget revenues. Rival production, coming to our markets will spur domestic producers to work better and produce goods of better quality.
I also hope that with further talks we will manage to lift export restrictions on a number of our goods.
Evhen Tsarkov, deputy chairman of the parliamentary committee on finances, banking activity, tax and customs policy (Communist party faction):

- If we put aside political pressure, the agreement is a positive thing. According to 2011 statistics, trade turnover with Russia made $76 billion, which is a huge constituent of our economy.

There is a good example of positive cooperation among Belarus, Kazakhstan and Russia. Recall the cheese war: when our producers were banned, Belarus increased export and replaced Ukraine. With 12- million population Belarus managed to reach soviet annual figures of 13 million tons of milk. We cannot even dream about such figures now.

When FTA with CIS comes into force, trade turnover with Russia will grow up to $100 billion. Additional $30 billion is pretty money. Ukrainian production, which does not go to European markets, can be placed on Russian, Kazakh or Belarusian markets. Advantages are obvious. The information that our products are not competitive is a story. Europe merely protects its markets and banned our products, regardless our membership in WTO.

Again, if we put aside gas wars and imperial ambitions of Moscow, the FTA agreement will be beneficial for all, including our medium and large businesses. According to the estimations of our committee, it will bring additional revenues and create new jobs, 60 thousand minimum in a year.

Oleksandr Holobutskiy, deputy director of the Agency on situation simulation:

- With FTA with CIS Ukraine will access to CIS markets, which is good for our economy. As for the negative moments, Russian economic interests prevail in the document. The agreement also has a political constituent, and Russia will keep protecting and promoting its national intrests. Thsi is not the end of our problems with Russia.

Dmytro Korchynski, president of the Institute on regional policy problems and modern political science:

- Under current condition of Ukrainian-Russian relations, we should not expect positive changes. Even within FTA, CIS countries may support all unfair initiatives of Russia towards Ukrainian products.

Silent trade wars between Ukraine and Russia will probably continue.

Ruslan Pavlenko, independent expert:

- On top of everything, the agreement allows introduction of antidumping and protection measures after "consultations". It turns out that the previous status-quo is merely decorated with a number of unclear obligations. It seems that the FTA with CIS project has appeared as Moscow's reaction to Kyiv's closer relations with Brussels, and is being carried now as further expansion of Kremlin's influence on CIS markets, considering Russia's membership in WTO.

As for exceptions, every country has fixed a number of export duties. However, Russia has registered 95 items, while Kyiv - only 31. Speaking about real economic effect for Ukraine, it is difficult to calculate the benefits despite all optimistic forecasts. Take for example engineering products (80% of Ukrainian engineering products are exported to Russia). It's not a fact that Russia will never introduce amendments and new sanctions, as it has happened with automobiles. The same concerns other groups of products.

Taras Chornovil, first deputy chairman of the parliamentary committee on foreign affairs (non-factional):

- The FTA agreement with CIS contains a number of pitfalls, which make the agreement advantageous for Russia first of all. Even if one of the paragraphs states that the sides cannot introduce customs duties or other fees for goods of other parties, the very mechanism of zeroing the protective measures is not well written and Russia may use it to set maximum number of obstacles for import. The same concerns the "common market" of the Customs Union, which is named in the document as "a state within a state". In fact, countries-participants do not withhold that the way to the removal of trade barriers is a long one. 

In general, there are many juridical and economic gaps. And I am not speaking about the fact that Russians have changed the original text of the document, signed in autumn of 2011, in their favor. These exceptions and provisions allow Moscow to take a decision by itself and then simply inform the others. And of course there is this scandalous paragraph 6, providing for introduction of sanctions against those parties, which join other economic unions and "harm interests of the partners." This clause definitely speaks against our FTA agreement with the EU.


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