Ukrainian prime minister focuses on economic issues in Moscow

MOSCOW. (RIA Novosti economic commentator Oleg Mityayev) - Viktor Yanukovych, the prime minister of Ukraine, was in Moscow on June 21 and 22 for a bilateral economic meeting with his Russian counterpart, Mikhail Fradkov, and to discuss with President Vladimir Putin preparations for the August meeting of the Russian and Ukrainian presidents.

Initiated in the spring of 2005, just after President Viktor Yushchenko came to power in Ukraine, the Russian-Ukrainian Commission held its first meeting in December 2006.

Yanukovych came to Moscow at a time of strained relations between Russia and Ukraine, as well as between him and his president, Viktor Yushchenko. The Ukrainian premier hinted before going to Moscow that he would uphold the economic interests of his country, rather than seek political support ahead of the parliamentary elections due in Ukraine this fall.

The Russian and Ukrainian authorities have proclaimed their support for expanding economic cooperation. As it is, Ukraine is Russia's fifth-largest trading partner (accounting for 6.8% of its foreign trade) in the world and the largest among the former Soviet republics. Russia accounts for 30% of Ukraine's foreign trade. Bilateral trade is going through a period of revival, and grew by more than 14%, to nearly $9 billion, in January-April this year.

Analysts agreed that Yanukovych would most likely also speak about problems hindering economic cooperation. The biggest of them is the growing price of Russian oil and gas, which Yushchenko has complained about this month, and which are responsible for Ukraine's negative trade balance with Russia.

Ukraine has a major ace in the hole for its energy talks with Russia: the bulk of Russian gas is delivered to Europe, its main trading partner and the main consumer of its gas, via Ukraine. Despite this, Russian gas giant Gazprom has been raising gas prices for Ukraine every year, claiming that this is part of its policy of adjusting gas export prices to the market situation.

The Russian Black Sea Fleet will be stationed in the Crimea, which is part of Ukraine, until 2017. But the continued presence of the Russian naval base in Sevastopol hinges on many conditions. For example, the parties need to determine which of them - the Russian fleet or Ukraine - will have control over the navigation systems, real estate and radio frequencies.

One more delicate problem is access of Ukrainian goods to the Russian market, because exports are the only way for Ukraine to reduce its trade deficit with Russia. However, limits on Ukrainian agricultural, food and ferrous metals imports are regularly introduced at the request of Russian producers.

Russia's and Ukraine's steel plants were built during the Soviet era, and therefore produce almost the same range of goods. No wonder that Russian steel producers are doing their best to close the borders to Ukrainian metal goods.

Therefore, one of the key issues on the Ukrainian leader's agenda in Moscow is an agreement on trade in metal products.

Despite a host of unsettled issues, Yanukovych sounded optimistic before his departure for Moscow.

"We are finding new solutions to the problems that divide us," he said. "Although some politicians are trying to upset our bilateral relations, I am convinced that Russia-Ukrainian ties will be peaceful, tranquil and friendly, as befits relations between strategic partners and neighbors that date back centuries. Discussions are never simple, yet we invariably find a way out."

The Ukrainian premier did not mention the possibility of discussing political issues in Moscow.

Yanukovych, considered the pro-Russian arch-rival of President Yushchenko, leads the Party of Regions, which will be the main adversary of the pro-presidential party Our Ukraine in the forthcoming early elections.

The prime minister said he would uphold Ukraine's national economic interests, a position he shares with Yushchenko. He said the president and he "have a common view of priority areas in which we will uphold the national interests" of Ukraine.

Experts believe that Russia will be unable to support Yanukovych this fall because it is preparing for parliamentary elections at the end of the year and for the presidential election next spring. This is not a good time for the Russian authorities to be distracted by Ukrainian politics.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

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