BRUSSELS
The European Union said on Friday the implementation of a free trade agreement with Ukraine would be delayed until the end of 2015, in a move signaling a concession to Russia.
The decision comes after EU Trade Commissioner Karel de Gucht’s talks in Brussels with Ukrainian Foreign Minister Pavlo Klimkin and Russian Economy Minister Alexey Ulyukayev.
Karel de Gucht said Ukraine would continue to export its products with temporary preferential tariffs until free trade agreement enters into force, citing the very fragile economic situation in Ukraine.
De Gucht also said that the decision leaves enough time for the countries to consult on how to address issues raised by Moscow.
De Gucht added that the decision was "part and parcel of the comprehensive peace process" in Ukraine, where government forces have been battling pro-Russian separatists since April.
The trade commissioner's announcement comes just after the Obama administration -- along with the EU -- expand sanctions on Russia’s financial, energy and defense sectors for the country’s role in the Ukraine crisis.
Kremlin has repeatedly threatened to introduce import tariffs on Ukrainian goods if the bloc and Ukraine proceed with the implementation of the deal from November 1 of this year.
On the other hand, Ukrainian President Petro Poroshenko announced on Friday that an association agreement between Kiev and the EU signed back in June would be sent to parliament next week.
It would be subjected to no changes or omissions, and take effect on November 1, President Poroshenko said in Kiev during talks with outgoing European Commission President Jose Manuel Barroso.
The association deal was initially designed as an overarching agreement inclusive of the free trade agreement, according to European Commission documents.
The Obama administration sanctioned Russia’s largest bank Sberbank on Friday as the U.S. moved to intensify pressure on Moscow with fresh sanctions.
“These steps underscore the continued resolve of the international community against Russia’s aggression,” U.S. Secretary of Treasury Jack Lew said in a statement.
Washington’s actions were taken in cooperation with the European Union which imposed its own set of sanctions on Moscow earlier Friday. The U.S. and the EU blame Russia for destabilizing Ukraine.
“It is essential that Russia work with Ukraine and other international partners to find a lasting settlement to the conflict. If Russia does so, these new sanctions could be suspended,” Lew said.
The Ukrainian economy has been heavily dependent on Russia. But since late last year, Ukraine has been beset by a number of issues such as the collapse of the former government of Victor Yanukovych following mass street protests, and neighboring Russia has played a key role in adding to the deterioration of the Ukrainian economy – arming rebels, annexing Crimea and implementing several economic sanctions on Ukrainian economy.
The protests erupted in November after Victor Yanukovych announced he was ditching an extensive trade and association agreement with the European Union in favor of closer ties with Moscow. Ukraine's President Petro Poroshenko signed a landmark trade and economic agreement with the European Union on June 27.
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