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. Last Updated: 07/27/2016

Kuchma Wants Russia in Free Trade Zone

KIEV -- Ukrainian President Leonid Kuchma has warned the Commonwealth of Independent States will remain an inert and loose grouping if it does not create a free trade zone.

Kuchma said Russia's non-participation in free trade agreements already ratified by several CIS states was a major obstacle impeding the work of the post-Soviet commonwealth.

He was speaking to reporters late Tuesday on his return from a CIS summit in Moscow. Most members of the 12-state commonwealth, which was formed after the collapse of the Soviet Union in 1991, say they would benefit from a common free trade zone within the CIS.

But Russia has delayed joining free trade agreements because it says this might undermine revenues to its state budget.

"If every country proceeds only from its national interests, especially such a huge country as Russia, while tackling such an important issue as free trade zones, then the CIS has no prospects for the future," he said.

"Today Russia is not ready (to join a free trade zone) ... but I hope Moscow will finally take positive steps."

Kuchma said Russia's First Deputy Prime Minister Mikhail Kasyanov was due to arrive in Ukraine next month to discuss ways of creating such a zone.

Kuchma said that generally warm bilateral ties between Ukraine and Russia were still more important for Kiev than problems inside the CIS.

But he criticized a recent decision by Moscow to impose high customs duties, including on crude oil deliveries to Ukraine. "The current situation cannot hold up to criticism," Kuchma said. "We have already proposed to Russia to reduce trade, custom and tariff barriers."

Ukraine largely depends on Russian crude oil and natural gas but owes Russia around $2 billion for the vital energy supplies. Russia remains Ukraine's main trading partner, but official data show that trade turnover fell to $6.3 billion in the first 10 months of 1999 compared with $7.9 billion in the same period of 1998.