Ukraine'S Kuchma Warns Of Trade War With Russia

In a televised question-and-answer session with journalists, Kuchma also said Russian President Boris Yeltsin's illness would do no good to Moscow's standing and relations with its neighbours. But he expressed confidence that the Kremlin leadership would maintain stability.

Kuchma said Moscow's proposals to introduce import taxes and quotas on key commodities, like sugar, will have dreadful consequences for Ukraine. Conditions are being posed which will in fact keep Ukrainian goods out of Russia. This is not an economic decision, but a political one. It applies solely to Ukraine.

The issue must therefore be decided by political means. If it goes unresolved, it will practically mean an economic war. There can be no winners in any war. Peace has to be declared at some point.

 

The Russian government last month said it would slap a value added tax of about 20 per cent on Ukrainian imports to curb what Russian producers say is mass dumping of cut-price goods on their markets.

The measures, including a one million tonne quota for sugar imports, were postponed until October after crisis talks in Moscow between the two countries' prime ministers. Ukraine says the moves are discriminatory and violate a free trade agreement signed within the context of the 12-nation Commonwealth of Independent States.

Russia is Ukraine's largest trading partner, accounting for $2.2 billion dollars of its exports in the first half of this year