Russia Rattled as Ukraine Shacks up with EU

The EU and Ukraine have begun putting into operation their bilateral trade deal since 1 January, in a move that, as was widely expected, has brought long-simmering tensions with Russia on the subject back to the fore.

The Deep and Comprehensive Free Trade Area (DCFTA), as the EU-Ukraine pact is known, is part of the larger political and economic Association Agreement between Brussels and Kiev that was signed in mid-2014.

When the trade deal was then ratified simultaneously by the European and Ukrainian parliaments in September 2014, the two sides had agreed to delay the application of the pact until 1 January 2016.

Moscow has long argued against the application of the EU-Ukraine trade deal, citing both competitiveness concerns as well as fears that this arrangement could lead to a massive influx of inexpensive European imports into Russia, given its economic relationship and shared border with Ukraine. Trade deal with EU given Ukraine’s in the Commonwealth of Independent States (CIS) agreements is also an issue.

Russian lawmakers agreed on 22 December to suspend the country’s own trade agreement with Ukraine, as part of the CIS trade zone, citing “extraordinary circumstances affecting the interests and economic security of Russia and requiring immediate action.”

Ukrainian leaders, for their part, have said that they will not be deterred by trade measures taken by Moscow in response to moving forward with the DCFTA.