Cooperation program “Ukraine and Russia 2020”: what are we negotiating?

On January 15, the government considered the cooperation program with the Customs Union member states until 2020. As this issue of The Day went to press, there was no official confirmation of the program’s approval by the Cabinet of Ministers. However, according to the media the program was approved in general and a decision was made to put the finishing touches to it.

The text of the document has not been published yet. However, Prime Minister Mykola Azarov said that the program contains a development plan for trade and economic relations with specific projects of production cooperation in the industry: machine-building, aviation and shipbuilding, fuel and energy sector, agriculture, space branch, transportation, and tourism. Azarov did not provide more detailed description of ways of settling such large-scale problems. So, The Day asked Valerii MUNTIAN, the government’s commissioner for cooperation with the Russian Federation, the CIS countries, the Eurasian Economic Community, and other regional unions, to explain the content of the prepared document:

“The program is aimed at the solving of specific economic problems between our two countries. The major problem is the decrease of trade turnover between Ukraine and Russia [let us remind that in the nine months of 2013 trade turnover decreased by 23 percent. – Author]. So, within the framework of the program in 2014, we want to bring back the lost 9.7 billion dollars to domestic economy, and we want to bring trade turnover with Russia to 65 billion dollars by 2020. Thus, trade between our countries must grow in general by 35 percent (export by 20 percent and import by 15). In this way we want to overcome the negative balance of payments and consolidate trade and investment connections. In what way? By exporting machinery construction products, such as turbines, engines, machines, compressors, transformers, electric locomotives, and railroad cars, to the countries of the Customs Union. Besides, due to resumed cooperation in aviation, energy, transportation, military industrial production, including the creation of joint ventures. In particular, the energy sector can provide the production of turbines and nuclear fuel.

“Another task is to secure the necessary level of investments. In what way? By removing trade and technical barriers. A mere lifting of trade barriers will add 800 million dollars to Ukrainian economy. Also, the number of anti-dumping measures can be reduced in the first place, in the supply of pipe products, forged and steel rolls, machine mounting, caramel products, and china. However, the lifting of trade restrictions on sugar supply is not discussed in this case, because it is settled within the framework of the agreement on a free trade zone with the CIS. The cancellation of export duties for energy sources by Russia was not brought up either, because it also relates not to the cooperation with the Customs Union, but to free trade with the CIS (the so-called agreement on the access to the pipe transport, article 7 of the protocol on the reduction and cancellation of export duties between the CIS member states). This summer Ukraine is planning to raise the question of canceling the export energy duties by Russia, which would open the way to exporting Caspian gas for us.”