Publication: Monitor Volume: 5 Issue: 139

The Kyiv meeting took stock of a steady decline in Ukrainian-Russian trade as a built-in trend, which Russia’s financial crisis has only served to accentuate. The bilateral turnover has slumped from US$15 billion in 1997 to US$12.5 billion in 1998 to an estimated US$4.5 billion in the first half of 1999. This trend starkly contrasts with the 1998-2007 program for Russian-Ukrainian economic cooperation, signed by the two presidents, which had projected a doubling of the bilateral trade turnover within that period. Ukraine’s share in Russia’s total foreign trade in 1998 dropped to 8 percent, slipping behind the share of Belarus–not least because Belarus enjoys in Russia a favored treatment not available to Ukraine.

The main causes of this decline are twofold, of which Pustovoytenko chose to name one. He renewed Ukraine’s chronic complaints–shared by most CIS countries–about Russian protectionism, overpricing of raw material and fuel exports–which increase the production costs of Ukrainian goods–and abusive value-added-tax assessment practices contravening World Trade Organization rules. Pustovoytenko renewed the familiar calls for turning the CIS into a free trade area or at least removing the barriers to Russian-Ukrainian trade. Stepashin for his part chose to focus on the erosion of “traditional” ties among ex-Soviet republics, a process he deplored in the familiar backward-looking fashion (UNIAN, Eastern Economist Daily (Kyiv), Itar-Tass, AP, July 15-19).

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