July 11, 2017 / 10:53 AM / 15 days ago

Russia calls EU-Ukraine pact an 'exemplary' breach of WTO rules

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FILE PHOTO - European Council President Donald Tusk shakes hand with Ukrainian President Petro Poroshenko after a joint news conference in Brussels, Belgium June 22, 2017.Eric Vidal

GENEVA (Reuters) - Russia has indicated a potential new legal salvo in its trade war with Ukraine and the European Union, telling the World Trade Organization that a trade deal between Kiev and Brussels breaks the rules by penalizing Russia.

Minutes of a June 29 meeting of the WTO's committee on regional trade agreements, published on Tuesday, record Russia's representative as saying the EU-Ukraine free trade agreement was "an exemplary case of a situation where a free trade area worsened trade conditions for other trading partners".

That meant it was a breach of the WTO rules, which say that free trade areas should encourage trade between the signatories without raising new barriers with other countries, the Russian representative said.

Russia has launched six trade disputes within its first five years as a WTO member, all of them against Ukraine or the EU. Its most recent complaint, in May this year, accused Ukraine of "a universe of restrictions, prohibitions, requirements and procedures" that discriminated against Russia.

Russia's representative at the WTO committee on regional trade agreements said the post-Soviet Commonwealth of Independent States had harmonized trade legislation with Ukraine since the 1990s, and signed a treaty in 2011 on coordinating the removal of technical barriers to trade.

"To sum up, there were dozens of bilateral and multilateral agreements in the field of trade and investment that linked Ukraine with the CIS countries. Many of Ukraine's commitments were inconsistent with its obligations under the EU-Ukraine Agreement," the minutes of the meeting said.

Russia's representative also said Ukraine's 2015 law on the natural gas market required the operator of Ukraine's gas pipelines to be a person with at least five years' experience from the European Energy Community or the United States.

The Energy Community, which aims to extend the EU's internal energy market to the Balkans and Black Sea region, excludes Russia.

The Russian representative at the WTO meeting asked how excluding pipeline experts from other countries could be justified and how it could correspond with the WTO rules that say free trade agreements should not diminish other countries' rights.

She also said that Russia's share in Ukrainian imports had fallen significantly since Ukraine began implementing its Association Agreement with the EU, while the EU's share had grown.

The chairman of the WTO committee invited follow-up written questions, which Ukraine and the EU were asked to respond to by July 20.

Reporting by Tom Miles; Editing by Catherine Evans

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