A two day session of the Ukrainian-Russian Cooperation Commission held in Kharkiv on June 20-21 under the chairmanship of the premiers resulted mainly in an agreement that Russia would grant Ukraine a six-year special purpose loan of $44 million to finish the construction of units No. 2 and No. 4 at the Khmelnytsky and Rivne nuclear power plants respectively. The much-expected free trade accord was again shelved. As Mr. Kasyanov put it, an agreement on a consortium to manage and develop Ukraine’s natural gas transport system will be drawn up in the nearest future. In his words, establishing such a consortium will be a serious step in the gas sphere, a sore point in the relations between the two countries for many years. The impression also is that Russia firmly insists that Kyiv join the Eurasian Economic Community in return for increased cooperation. Mr. Kasyanov said in Kharkiv, among other things, that he hopes Ukraine will soon make its final decision on further integration into the EAEC. Mr. Kinakh said nothing new about this. Kyiv has recently been reiterating that it will make a decision on the basis of Ukraine’s national interests. Much has been said about the impossibility of simultaneously entering two unions, the EU and the EAEC.
The prime ministers noted that commodity turnover between the two countries was no longer declining. The Ukrainian premier is certain that coordinating actions in the process of Ukraine’s and Russia’s integration into European structures and the WTO will only help overcome the downward tendency in turnover caused by competition, a deteriorated world market situation, and Russian VAT rules. Premier Kasyanov in turn believes commodity turnover will rise thanks to joint complementary production projects. In particular, he characterized as promising the cooperation between Russian business and the Kharkiv-based Turboatom state aviation enterprise.
On June 20 the premiers also visited the Ukrainian-Russian border, including the state-of-the-art Hoptivka international auto checkpoint. The ribbon they cut was to symbolize a new — and supposedly the best — stage in the relations between the two neighbors. Incidentally, while the two countries’ diplomats agreed as long as two years ago that one could soon cross the border by producing a foreign-travel passport without a visa, Russia has just announced it is introducing a new border procedure next year. No wonder this announcement is being discussed all over Kharkiv, for many local residents have relatives and friends in Russia’s neighboring Belgorod oblast, and thousands of people are engaged in cross-border shuttle trade, private taxi-driving, etc. Until very recently, Kharkiv residents would travel to Moscow boarding a train in Belgorod rather that in their own city, for it was so much cheaper and simpler.
While the gas accords had to a large extent been predetermined by the Saint Petersburg meeting of the two countries’ presidents, the visit of the premiers to the Kharkiv- based Turboatom association shows a new direction in bilateral relations. In particular, as the United Energy Systems of Russia Company has adopted a power plant technical modernization program, it needs close contacts with the equipment-producing facilities. St. Petersburg’s Elektrosila is already cooperating with Kharkiv’s Elektrovazhmash to repair equipment for the Rivne and Zaporizhzhia nuclear power plants. Russia also offers a market for Ukraine’s An-74 aircraft. These and other problems were also in the focus of the business forum in which the two prime ministers took part.
It is perhaps no accident that the meeting took place in Kharkiv. This is the third large-scale and fruitful bilateral action taken in that city over the past six months. The ball was set rolling by Leonid Kuchma and Vladimir Putin last December at a business forum. “Kharkiv is turning into a new capital of Ukrainian-Russian relations,” Pres. Kuchma said at the time.
Certainly, what plays a major role is not only the city’s proximity to the eastern neighbor’s border and the Russia-oriented nature of its industrial exports but also the environment in which these meetings occur: the two sides met for the third time at the Institute of Public Prosecution of Yaroslav the Wise National Law Academy. The venue itself is conducive to well considered and balanced decisions.
