Ukraine Live Day 685: The Trade War Between Kiev And Moscow Escalates

Nearly two years ago the pro-Russian Ukrainian president Victor Yanukovych fled in the face of the Euromaidan Revolution, yet Ukraine and Russia have remained major trading partners despite Moscow’s undeclared war in the Donbass and the illegal annexation of the Crimean peninsula. But that is changing. 2016 is starting off with new developments in a trade war that has seen its steepest escalation only within the last two months.

Starting on January 1, Russia has banned most food imports from Ukraine. RFE/RL reports:

The tit-for-tat moves come in the wake of Ukraine’s decision to implement a free-trade pact with the European Union despite Russian opposition.

Russian officials said that the ban on Ukrainian food imports was necessary to protect its internal market, claiming that European products could reach Russia by way of Ukraine without paying import duty.

An initial attempt to finalize the pact had failed in 2013, sparking protests in Kyiv that led to the ouster of Ukraine’s pro-Russian president, followed by Russia’s annexation of Ukraine’s Crimea, and a Russian-backed separatist uprising in eastern Ukraine.

Following Russia’s ban, Ukraine is set to ban Russian food imports on January 10. The Telegraph reports:

The ban on imports including beef, tobacco, chocolate, and alcohol products comes after Russia closed its own borders to a range of Ukrainian foods.

The embargo, which comes into force on January 10, will stay in place until August 5 or “until the cancellation of the ban on imports of agricultural products, food, and raw materials produced in Ukraine into the customs territory of the Russian Federation,” according to a decree signed by Arseniy Yatsenyuk, the Ukrainian prime minister.

Russia closed its borders to a range of Ukrainian meat, fish, dairy and vegetable products on Friday as part of pre-announced response to Ukraine’s decision to implement a free trade pact with Brussels.

The food embargoes are not the only signs that an economic showdown may be right around the corner. As we have been reporting, since November the supply of electricity and ground transportation to Russian-occupied Crimea from the Ukrainian mainland has been disrupted partially or entirely, first the result of an activist ‘blockade’ and then the result of the explosion of electrical pylons which supply the peninsula with power.

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Ukraine has also recently been outraged by the relocation of two oil platforms that were nationalized by the Russian government along with the Crimean peninsula in March 2014. Though prospects of the return of the Crimean peninsula may not be likely any time soon, the relocation of the oil rigs to Russian waters, for new and undefined “security reasons” according to Russian officials, now means than Ukrainian control of these oil rigs, which were once owned by Kiev, seems even more remote.

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Now, Reuters reports that the Ukrainian government says that its power grid was attacked by a Russian cyber attack last week:

A power company in western Ukraine, Pryka-rpattyaoblenergo, said on December 23 that a swath of the area it serves had been left without energy, including the regional capital Ivano-Frankivsk, due to “interference” in the work of the system.

Ukraine’s SBU state security service blamed Russia, which has not so far commented on the allegation. The energy ministry in Kiev said on Thursday that it had set up a special commission to investigate what happened. While cyber attacks are commonplace, few successful assaults on industrial targets have been documented.

If the SBU’s accusations are validated by the probe, it would be the first time a specific power outage has been credibly linked to a cyber attack, said Robert Lee, a former U.S. Air Force cyber warfare operations officer. Lee said it was too early to say whether the SBU’s account was credible. If the claims are validated, then the incident could prompt other nations to use similar tactics.

— James Miller