Free trade seems not to work in the Single Economic Space
A Ukrainian-Russian conference will take place on December 9 to deal with Russia’s sudden ban on Ukrainian fishing in a joint Black Sea fishing zone. The ban is regarded as part of the current situation with the Single Economic Space project involving Ukraine, Russia, Belarus, and Kazakhstan, especially against the Tuzla backdrop.
Less than three weeks remain before the meeting of the CIS Economic Council in Moscow where a top-level SES team is expected, of all things, to continue coordinating a series of fundamental measures to establish a free trade regimen. The previous ninth meeting of the team, including Ukrainian Vice Premier Mykola Azarov, his Russian counterpart Viktor Khristenko, Belarusian Vice Premier Andrei Kobiakov, and Kazakh Vice Premier Sauat Mynbayev, must have been a complete failure. Evidence of this is the announcement that the meeting, meant to draft fundamental free trade measures, was not completed.
As usual, the dignitaries in attendance tried to sweeten the bitter fruit from Kyiv. Mykola Azarov, commenting on the results, said that the team had made “considerable progress in the direction of the complex of measures and already agreed on certain important issues.” Period. The Ukrainian Vice Premier’s Press Secretary Vitaly Lukyanenko added that the meeting in Moscow would discuss about one-third of the free trade area issues that could not be settled on Saturday. The Russian media, referring to a member of the Kazakh delegation, reported that Belarus, Kazakhstan, Russia, and Ukraine differed on fifty out of 168 issues, including customs tariff regulation, natural monopolies, etc.
That time Ukraine once again declared there was a limit past which it would not step when establishing the SES. Premier Yanukovych, attending a meeting of Baltic heads of state, was asked by Lithuanian journalists whether President Kuchma’s signing the SES accords with Russia, Belarus, and Kazakhstan meant a change in the Ukraine’s foreign policy course. He replied, “Ukraine has not and will not change its foreign policy course. This is an economic agreement aimed at developing trade and economic relations between Ukraine and the CIS states, specifically with Russia, Belarus, and Kazakhstan, which is expected to expand the opportunities of regional cooperation.” He stressed that establishing a free trade area is a key objective in the course of implementing this agreement. President Kuchma, meeting with the participants of that unfinished meeting, said, “Transfer to the next stages of integration among these countries should be made only after passing through the previous one.” He noted in particular that completing the FTA project is the first step toward the implementation of the SES accords.
Meanwhile, the Russian media continue to explain why Moscow needs SES so badly. Oleg Dorozhinsky, Candidate of Science (Politics), wrote in Nezavisimaya gazeta: “While losing dubious benefits stemming from protectionist barriers, Russia without doubt gains influence on the situation with the ‘economically united’ neighbors. While this could be objected to by Belarus and Kazakhstan, Ukraine can hardly overestimate the opportunity to actively participate in the political process. The next presidential elections... will be of principal importance for both Ukraine and Russia...”
In a word, the biggest SES news is the absence of news. Ukraine is trying to keep the process within the FTA limits; Russia wants more than that and continues to impose various restrictions on bilateral economic relations.
