HIT BY RUSSIAN EXCISE TAXES, UKRAINE SEEKS OTHER TRADING PARTNERS.

Kiev is unhappy with Russian president Boris Yeltsin’s January 19 decree imposing excise duties on Ukrainian products imported by Russia. Ukrainian foreign economic relations and trade minister Serhy Osika said yesterday that Yeltsin’s decree violates the two countries’ free trade agreement, as well as Russia’s obligation toward the International Monetary Fund to refrain from discriminatory trade practices. Ukraine is also concerned that Russian excise taxes might be forced on Belarus and Kazakhstan within the framework of those three countries’ customs union. To preempt such a move, Ukraine has proposed a free trade agreement with the Russia-Belarus-Kazakhstan customs union. To date, Ukraine has turned down Russian proposals to join the union. Regarding inter-CIS trade, Osika said Ukraine was interested in low import tariffs on energy resources and high import tariffs on agricultural goods, whereas Russian interests were precisely the opposite. (12)

Yeltsin’s latest decree expands the range of Ukrainian goods subjected to Russian excise taxes. Last fall, Russia imposed such taxes on approximately 200 types of Ukrainian-made goods, pricing some of them out of the Russian market. Repeated complaints by Ukrainian president Leonid Kuchma and prime minister Yevhen Marchuk to their Russian counterparts have been to no avail. At last week’s meeting in Moscow, Yeltsin urged Ukraine to join the CIS customs union, then imposed the new excise duties. Ukraine now seeks other trading partners. Last week, Ukrainian and Moldovan officials began discussions in Chisinau toward creating a Ukraine-Moldova customs union outside of the CIS framework. After completing talks with Prime Minister Vladimir Meciar in Slovakia, Marchuk said yesterday that Kiev is negotiating bilateral free trade agreements with Poland and Slovakia in preparation for a bid to join the Central European Free Trade Association. (13)

Russia Seeks Alliance with Moldova.