The Russian government will allow on Tuesday the import of 260,000 metric tons of steel pipes annually from Ukraine duty free, Prime Minister Vladimir Putin said.
"Today we'll make a decision which has long been expected by Ukrainian pipe producers. As the government of Ukraine requested, we'll make a decision on 260,000 tons of Ukrainian pipes, which will be sold on the Russian market," Putin said.
The decision follows a landmark deal ratified by the parliaments of Ukraine and Russia on Tuesday on extending the lease on a Russian naval base in the Ukrainian port of Sevastopol for 25 years after the current lease expires in 2017 in return for a 30% discount on Russian natural gas for Ukraine.
Russia halted from April 1 the imports of Ukrainian steel pipes duty free over the failure of the two ex-Soviet republics to agree on a quota for the second quarter of 2010.
In February 2010, Russian steel pipe producers, accounting for over 70% of the domestic steel pipe market, requested the government halt the duty-free imports of pipes from Ukraine starting from the second quarter.
They argued the Russian pipe market had narrowed considerably due to the 2008 global economic crisis and the Ukrainian pipe supplies kept the production capacities of domestic enterprises underutilized.
Ukraine's metals industry, a major source of the country's budget revenues along with the chemicals sector, views Russia as a vast market for the sale of its products at low prices, something potentially damaging for the Russian steel industry.
In 2009, Ukrainian producers exported 230,000 metric tons of pipes to Russia, while Russian manufactures have proposed to limit this volume to 217,000 tons.
SOCHI, April 27 (RIA Novosti)