Ukrainian firms are squealing that Russia is initiating what amounts to a trade war by putting in place discriminatory and costly border procedures that are delaying Ukrainian goods from reaching their destinations in Russia. Russian leaders have taken care to deny any outright responsibility, seeming to indicate that this is a bureaucratic matter to be resolved between the countries’ respective customs officials. But, as the FT reports, some Russian officials have let the mask slip a bit:
Appearing on radio programme Echo Moscow earlier, Duma lawmaker Leonid Slutsky said: “The difficulties Ukrainian goods are experiencing in passing through Russia’s customs are caused by simple bureaucratic hurdles Ukraine faces by not being a member of the Customs Union.” [...]
Citing reports from local companies, Dragon Capital, the Kiev-based investment bank, said some exporters are facing “stricter control procedures, obligatory unloading, checking and reloading of all goods”.
“With Russia staunchly opposed to Ukraine’s plan to sign an association and free trade agreement with the EU in November, pressure on Ukrainian exporters to Russia may escalate further,” the bank added.
The key to understanding Russia’s vision of the world is Ukraine. Few Russians, and certainly not Putin and his allies, have accepted or can accept true Ukrainian independence. Moscow’s hope of restoring the power it lost when the Soviet Union fell is entirely dependent on the re-absorption, in one form or another, of Ukraine. Completion of an EU deal by Ukrainian leaders and a rejection of a customs union with Russia would be the biggest setbacks Putin has encountered yet, weakening him at home.
Expect Russia to keep pushing on this one.
[Photo courtesy of Getty Images.]