EU Trade Commissioner Cecilia Malmström and Russian Minister for Economic development Alexei Ulyukayev have met in Brussels today to discuss EU-Russia trade relations. During this meeting, requested by Minister Ulyukayev at the end of 2014, discussions focused on developments in multilateral trade agenda, bilateral trade relations including WTO commitments and concerns expressed by Russia in relation to the EU-Ukraine Deep and Comprehensive Free Trade Area of the Association Agreement (AA/DCFTA) were also discussed along the possible resumption of trilateral talks in order to achieve practical solutions to these concerns.
Commissioner Malmström said:
"I place great importance on our trade and investment relationship with Russia, and it is in our mutual interest to overcome the current difficulties. To fulfil our relationship's potential, the current Ukraine crisis needs to be solved. As I have stated in many occasions, this is a political problem requiring a political solution. I hope that the respect of the measures agreed in Minsk will lead to the way out of the crisis.
I therefore support the resumption of trilateral talks between the EU, Ukraine and Russia in order to achieve practical solutions to concerns raised by Russia with regard to the implementation of the DCFTA between Ukraine and the EU. We continue to stand ready to find ways to address the concerns expressed by Russia, within the flexibility provided by the EU-Ukraine DCFTA, which, however, will not be amended.
It is only via a solution to the Ukraine crisis that we can lay down the foundations for a renewed bilateral partnership based on dialogue and cooperation. Moreover, Russia needs to respect its WTO commitments in full. Once conditions are met, we can start envisaging something more ambitious for our bilateral trade relationship."
Russia is the third trading partner of the EU and the EU is the first trading partner of Russia. Russia represents 10% of EU external trade and the EU represents 50% of Russian external trade. Since 2010 mutual trade has resumed its growth reaching record levels in 2012.
- the EU exported for € 123 billion(mainly vehicles, machinery and transport equipment, medicines, chemicals, and agricultural products) and
- imported for € 212 billion(mainly raw materials, in particular, oil (crude and refined) and gas.
- in 2014, bilateral trade decreased by an estimated 12 to 13%, owing to different factors, including the difficult environment with restrictive measures on both sides, the drop in oil prices and the sharp depreciation of the Russian currency.
Since its accession to the WTO in August 2012, Russia has maintained and adopted a number of protectionist measures. The EU has already filed four WTO cases (automobile recycling fee, pork ban, anti-dumping duties on light commercial vehicles, excessive tariffs). In this context, the most recent move on 26 February 2015 is the request by the EU of the establishment of a dispute settlement panel at the WTO concerning Russia’s excessive import duties, in particular on paper products, refrigerators and palm oil.
EU-Ukraine-Russia trilateral talks on the EU-Ukraine Deep and Comprehensive Free-Trade Area (DCFTA)
Since November 2013, the Commission has engaged in a bilateral consultation process on the EU-Ukraine DCFTA with Russia – extended to Ukraine since June 2014. With these meetings the EU has shown its openness to discuss Russian alleged concerns about the EU-Ukraine DCFTA. 10 meetings were held at technical and political levels.
At the latest ministerial meeting on 12 September 2014, the three parties to this consultation process agreed to continue these talks, that despite the efforts of the European Commission have not resumed yet. The joint declaration of 12 February 2015 in Minsk provides that this consultation process on the implementation of the DCFTA will continue. In these trilateral talks, we are ready to explore how the concerns expressed by Russia can be addressed through the existing flexibilities in the EU-Ukraine DCFTA.
These talks will not aim at renegotiating or amending the DCFTA of the bilateral Association agreement between the EU and Ukraine, has been ratified by several Member States, and has received the consent of the European Parliament. The DCFTA will start applying on 1/1/2016.