Ukraine Must Work With Customs Union After EU Pact, Azarov Says

Ukraine must find ways to cooperate with a Russian-led customs union after agreeing on a free-trade zone with the European Union, Prime Minister Mykola Azarov said.

The former Soviet republic needs to boost trade with Russia and is prepared to sign separate pacts with the customs union, Azarov said today in Kiev, the capital.

“These integration processes shouldn’t be set against each other,” he said. “On the contrary, optimal ways of cooperation must be worked out.”

Russia wants Ukraine to join a customs union it’s formed with Belarus and Kazakhstan, offering cheaper natural gas and more trade in exchange. Ukraine is instead seeking to sign an Association Agreement, including a free-trade accord, with the EU in November, a move Russian officials have said will spark measures to shield the country from increased European imports.

Russia banned imports from Ukrainian candy maker Roshen last month, saying carcinogens had been discovered in its products, and temporarily imposed stricter customs-clearance rules on Ukrainian exporters two weeks ago. Almost a quarter of Ukraine’s exports went to Russia in the first six months of the year, according to state statistics office data.

The delays were related to disagreements with Russia over the customs union, Azarov said last week. He met Russian Premier Dmitry Medvedev in Moscow on Aug. 26 to discuss trade.

“Any outside pressure on Ukraine related to its ambition to sign the Association Agreement with the EU is not acceptable,” EU Enlargement Commissioner Stefan Fule said yesterday after meeting the head of Ukraine’s National Security and Defense Council, Andriy Klyuev.

“The signature of a free trade agreement with a third party, meaning us, may not be used as a justification for the tightening of customs procedures,” Fule said.

While Ukraine plans to sign the EU pact, it wants to “preserve and develop” relations with Russia at the same time, Klyuev said yesterday in Brussels.

To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.