Russia Cancels Free Trade Agreement With Ukraine

In anticipation of the Ukraine–European Union Association Agreement coming into force, Russian President Vladimir Putin has suspended the treaty on the free trade zone between Russia and Ukraine. The agreement will no longer be valid from 1 January 2016, when free trade between the EU and Ukraine will become possible.

In essence, this means that goods of Ukraine will now be subject to customs duties according to "most favoured nation treatment" principle.

The presidential decree states that the treaty is cancelled "due to exceptional circumstances affecting the interests and economic security of the Russian Federation". The Russian Government has repeatedly warned that the agreement between Ukraine and the European Union is incompatible with the free trade regime between Ukraine and Russia.

The import of a number of Ukrainian goods has previously been prohibited. The embargo was announced as a response to the Ukrainian sanctions against Russia.

The Ukraine–European Union Association Agreement come into being in October 2014. However, in September 2014, following consultations in Brussels, the EU, Ukraine and Russia agreed to postpone the introduction of the agreement until 31 December 2015.