Ukraine-Belarus trade dispute escalates

By bne IntelliNews November 26, 2015

Ukraine will impose a special duty of 39.2% of the customs value on imports of a number of Belarusian goods starting from January 20, 2016, fuelling a spiralling trade dispute between the neighbours.

The measures, introduced in response to what Ukraine deems "discriminatory and hostile actions" of the Belarusian government towards imports of Ukrainian confectionery and brewing products, threatens to undermine political relations with the Belarusian leadership, which has played a crucial role in Kyiv's peace negotiations with Moscow in the Donbas conflict.

Kyiv's move may trigger similar trade restrictions against Ukrainian imports to Belarus. This in turn would compound the country's economic woes amid Russian threats to impose food embargo on Ukrainian products from January 1 over the Ukraine-EU free trade pact taking force the same day.

The Ukrainian government is reacting to a Belarusian government decree signed in August that stipulates that Ukrainian candy and beer producers should obtain special sanitary certificates. According to Ukrainian experts, procedures for obtaining these document were not properly adjusted.

The new 39.2% duty will be imposed on dairy products, cheese of all kinds, some fish products, sugar-based confectionery and bakery products, chocolate, malt beer, vodka, salt and other goods, according to Uriadovy Kurier government paper, local media reported on November 25.

According to Belarusian media outlet Business News, the list of goods subject to the special duty includes 43 items. Deliveries of these products to Ukraine decreased by 34.7% in January-September compared with the same period of 2014.

Belarusian experts believe that Ukrainian duties may affect about 6% of Belarusian exports to the  country.

On November 20, Alexei Bogdanov, head of the central office for foreign economic activities at the Belarusian Agriculture and Food Ministry, said Belarus intends to replace Ukraine in Russia's food market as a result of the Russian embargo on Ukrainian-made foods from January 1.

"What should we do - let our products rot in a warehouse, or sell them and earn foreign currencies by increasing the turnover" Bogdanov told BelaPAN news agency.

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