The West is casting suspicious glances at Eurasian integration to which Ukraine is a party. The well-known US political scientist Zbigniew Brzezinski, who recently visited Kyiv, predicted in this connection that Ukraine’s road to the EU would be far from smooth. Besides, as Ukraine keeps losing points in the Euro-Atlantic direction, it is still not clear what this country is going to gain from SES (Single Economic Space — Ed.) membership. Real life shows that, SES or no SES, Ukrainian companies are being discriminated against on the Russian market.
SES framework agreements have been signed and ratified. Russian foreign ministry spokesman Aleksandr Yakovenko noted last Thursday that the SES would ensure the free movement of goods, services, capital and labor, and pursue coordinated foreign-trade, monetary and fiscal policies. Underlining the special political significance of the fact that the parliaments of Belarus, Kazakhstan, Russia, and Ukraine ratified the SES founding treaty almost simultaneously, Mr. Yakovenko said, “By doing so, the Four once again demonstrated their serious intention to create a qualitatively new association in line with modern realities.”
This declaration was made public at the very moment when things are practically going in the opposite direction. Just the other day a scandal erupted in the “Russian — Ukrainian skies.” On May 18 the Russians denied planes of the Ukrainian Aerosvit Airline Company permission to fly over Russian territory on the new, regular transcontinental Kyiv-Beijing route. In contravention of the Chicago Convention on International Civil Aviation, our neighbor’s aviation authorities are demanding that Ukraine pay navigational fees on top of compensatory and other charges. Moreover, Russia has not justified this demand in clear-cut juridical terms, even though the convention prohibits the imposition of customs duties, taxes, and other fees by one state on another for the right of transit across its territory. Leaving aside the matter of international aviation conventions, Russia’s actions run counter to the Ukrainian-Russian intergovernmental agreement on cooperation in air transportation. Although the Russian side has officially acknowledged collecting compensatory fees from foreign companies for flying over its territory, it has failed to produce any international or national legislative or standard setting documents that stipulate these fees. The Russians earn an estimated 300 million “fly-over dollars” every year. The Ukrainian side was forced to adopt measures by imposing sanctions — effective from June 1 — on Aeroflot’s transit fights to or from Greece over the territory of Ukraine. Should Aeroflot planes have to bypass Ukraine, the Russians will be unable to compete with Greek companies — on the very eve of the Olympics and the holiday season.
This means that another trade war has broken out, this time in the skies over the Single Economic Space.
Ukraviatrans announced that Russia’s actions are a glaring violation not only of the intergovernmental agreement but also the spirit of the SES treaty ratified by the Ukrainian and Russian parliaments on April 20, which includes the principle of free transit of services across the borders of Ukraine, Russia, and Kazakhstan. But how can one talk of free transit if Aerosvit Ukrainian Airline planes have been bypassing Russian territory on their nonstop Kyiv-Beijing flights since May 12? This will undoubtedly affect the economic effectiveness of such a flight. But the real reason why the compensatory fee was imposed is the forecast that the Kyiv-Beijing-Kyiv flight will allow Ukraine to recapture about 80% of the China-bound passenger flow previously monopolized by the Russian air carrier. “No other country in the world pursues such a discriminatory aviation policy,” Interfax-Ukraine quoted a source as saying.
Curiously enough, the Ukrainian side had to “set a bomb under” Vice-Premier and Minister of Finance Mykola Azarov, the main SES devotee and negotiator, to “repel the Russian air attack.” In a telegram to his Russian counterpart Aleksandr Zhukov, Azarov emphasized that the position of Russian aviation authorities runs counter to the spirit of the SES treaty ratified by the parliaments of Ukraine and the Russian Federation and, particularly, to the inherent principle of free transit of services across the borders of Ukraine, Russia, and Kazakhstan.
Is the unfriendly, to put it mildly, and tough nature of Russia’s trade and customs policies toward Ukraine, which every now and then provokes conflicts between the two countries, something new for Mr. Azarov? The question is rhetorical, as the saying goes. It will be recalled that Russia and Ukraine have “warred” over sugar, caramel, pipes, and metal-each time at Russia’s initiative to boot. Incidentally, the Ukrainian public has always believed that averting these kind of conflicts by establishing an area of free trade without exceptions is by far the only reason for joining the SES.
COMMENTARY
Volodymyr MAKSYMOV, Director, Ukraviatrans:
“So far the Russian side has made no positive decisions regarding this issue. We expect some progress will be achieved at the forthcoming Yalta summit. However, I think the current impasse should be called a conflict of interests between Ukrainian and certain Russian officials rather than a trade war. As far as we know, Aeroflot received $247 million in 2003 from Western European companies this way. This is a handsome chunk of money, which bureaucrats are virtually fighting over. We are still insisting that Ukraine, as a member of the Single Economic Space, should be guided by entirely different rules. This is the fundamental stand of our company, and my own personal view. After all, this situation is causing the Ukrainian carrier to lose 320-350,000 dollars annually, an enormous amount indeed for a company that has just begun offering flights and is still operating in the red.”
