Russia Eases Up on Ukraine Imports -- Business as Usual

August 21, 2013 01:03 PM

We reported yesterday that officials in Russia have placed prohibitive customs checks on goods traveling there from the Ukraine. The move was designed to motivate Ukraine away from signing on to the European Union, and into an alliance with Vladimir Putin.

The Ukraine's Ministry of Revenues and Duties said Ukrainian goods are now moving into Russia "as normal" again. But that does not mean that all is well in the FSU. Russia has hopes that Ukraine will agree to join Russia's trade venture along with Belarus and Kazakhstan.

Ukrainian President Viktor Yanukovych has been very clear that he has no interest in Putin's Customs Union, and intends to sign a free-trade and political-association agreement with the European Union this November.

An economic advisor to Vladimir Putin told reporters on Sunday that the increased border checks were in preparation for toughening customs procedures if Ukraine were to take the "suicidal step" of signing the E.U. deal.

For the moment, Ukraine and Russia have returned to business as usual. The Ukraine would like to move forward and join the E.U. and the Union would be glad to have access to Ukrainian natural gas deposits. But do not expect Putin and the Russians to go quietly if Ukraine signs on to the European Union in November.


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