Author`s name Dmitry Sudakov

Russia can ruin Ukrainian economy in one instant

A chill out of relations between Russia and Ukraine may lead to a trade war between the two brotherly nations. Russia will obviously suffer losses as a result of a possible war, although Ukraine will have to face much bigger problems at this point.

Ukraine’s Investgazeta magazine wrote that Russia may eventually pull out from a free trade agreement with Ukraine. The export of the Ukrainian tube rolling, machine-building and defense industries will face a very serious danger at this point. Hundreds of Ukrainian enterprises will suffer multi-million losses, for the production of many of them will become a lot less competitive on the Russian market. Other companies will fail to redirect their export shipments within a short period of time. To crown it all, many Ukrainian companies will not be able to reach other European markets because of the fact that their products would be noncompetitive there.

Four Ukrainian meat-packing factories were forced to shut down their production in 2006, when Russia introduced an embargo on shipments of Ukraine’s meat and milk products in 2006.

Andrei Blinov, an expert of the Ukrainian Institute for Russia, said that Ukraine may also raise the question of anti-dumping investigations against Russian goods and restrict the shipments of metallurgic and chemical products from Russia, for example.

The expert added, however, that Ukraine had fewer opportunities for such a response to the Kremlin.

“Russia mainly delivers raw materials to Ukraine, and this raw material is categorized as critical, i.e. extremely important for the Ukrainian industry,” the expert said.

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