The European Union said today it will delay implementation of a free trade deal with Ukraine by 15 months to end-2015, as part of efforts to support the peace process.
EU Trade Commissioner Karel de Gucht said, after talks with Russian and Ukraine ministers, that while the free trade agreement would be delayed, Brussels would still extend temporary preferential tariffs on Ukraine goods.
De Gucht said that once Kiev ratifies the EU Association Accord, expected next week and which was negotiated at the same time as the Deep and Comprehensive Free Trade Agreement, then Brussels would offer "additional flexibility" in the hope of meeting Russian concerns that its economy would suffer if the DCFTA went ahead.
This would be done as part of efforts to "fully support the stabilisation of Ukraine," he said after talks with Ukraine Foreign Minister Pavlo Klimkin and Russian Economy Minister Alexi Ulyukayev.
"Such flexibilty will consist in the delay until 31 December 2015 of the provisional application of the DCFTA," he said.
The three parties "will continue to consult on how to address concerns raised by Russia," De Gucht said in a statement.
"This ongoing process needs to be part and parcel of a comprehensive peace process in Ukraine, respecting the right of Ukraine to decide on its destiny as well as the territorial integrity of Ukraine," he added.
De Gucht's statement comes just after the EU imposed another set of tough economic sanctions on Russian banks, oil and defence companies for Moscow's role in Ukraine where a ceasefire agreed last Friday between government and pro-Russian rebels appears to be holding.
As Ukraine turned towards the west and away from its Soviet-era master in Moscow, Russia has tried to reassert its influence, seeing the DCFTA in particular as bolstering Kiev and potentially harming its own economy by allowing an influx of cheaper and better EU goods into the country, an important Russian market.
Equally damaging, Moscow said these goods could then be sold on into Russia itself, damaging domestic industry.
