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Partners once, adversaries for
now
By Sergei Blagov
MOSCOW -
A series of moves in recent days have failed to resolve
growing trade disputes between Russia and Ukraine, the
two biggest ex-Soviet states.
Trade between the
two, which had reached a total of US$12 billion last
year, has declined an estimated 30 percent this year due
to punitive tariffs and restrictions. Russian Prime
Minister Mikhail Kasyanov met his Ukrainian counterpart
Anatoly Kinakh in Moscow Friday, August 16, to discuss
disputes over gas supplies. A week earlier Ukrainian
President Leonid Kuchma met Russian President Vladimir
Putin in Moscow to discuss ways of saving trade
relations. Officials say these talks have helped avert a
full-scale trade war, but serious differences remain.
On July 30 Ukraine slapped a 31.7 percent import
tariff on Russian-made cars. A week later Russia imposed
an import tariff on Ukranian steel of, yes, 31.8
percent. The leaders agreed to cut import restrictions
on some goods, but they could not resolve differences
over many, including Russian cars.
Disputes over
financial issues also remain unresolved. Ukraine has
been claiming several former Soviet assets abroad, but
it has been reluctant to share with Russia any
responsibility for repaying the debts of the former
Soviet Union. Official meetings to divide old Soviet
assets have remained inconclusive.
Energy is at
the heart of many of the disputes. Ukraine, which
depends on Russia for 80 percent of its energy needs, is
entitled to a certain amount of free gas as payment for
a gas pipeline that crosses its territory en route to
Europe. But Russia says Ukraine takes more than the
agreed amount.
Russia has been insisting that
Ukraine pays up the debts it has run up for the gas, but
the two are not agreed on what Ukraine owes. Ukraine
says it owes $1.4 billion, the Russians put the amount
at more than $2 billion.
Kuchma concedes that
the practice of stealing gas from export pipelines is
not "civilized" and has promised Putin that his
government would crack down on offenders. To solve the
gas disputes and associated financial problems, Putin
and Kuchma agreed to set up a joint natural gas
consortium by October this year.
Ukraine, which
used to be the breadbasket of the Soviet Union, and
produced up to a third of its weapons, has now run up a
foreign debt of about $12 billion. The two states have
called one another natural partners, but since the
break-up of the Soviet Union in 1991 differences have
surfaced also over several other issues such as trade,
the division of Soviet assets, and Ukraine's wish to
join NATO (North Atlantic Treaty Organization).
Russia's Black Sea fleet, which rents a harbor
from Ukraine in the Crimean port of Sevastopol, is at
the heart of a complicated financial dispute between the
two countries. The Ukrainian-born former Soviet leader
Nikita Kruschev "gifted" Crimea to Ukraine in 1954, and
Ukraine inherited the peninsula at independence. Russian
nationalists challenge the legality of the "gift" and
the transfer.
In February 1999 Russia and
Ukraine approved a friendship agreement and three
separate accords on the Black Sea fleet. Under the
agreements Russia recognized Ukrainian sovereignty over
the Crimean Peninsula and signed a 20-year lease for
Sevastopol where its share of the Black Sea fleet is
based. (The fleet itself was split between the two
countries when the Soviet Union broke up.)
Tricky negotiations lie ahead in resolving
several of these disputes. Meanwhile, the collapse in
trade and trust is hurting both countries - at a time
and in a region in which both could use all the friends
they can find.
(Inter Press Service)
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