On November 18, Russia confirmed its intention to impose retaliatory E&F measures against Ukraine that are linked to the implementation of Kiev’s Association Agreement with the EU, which will go into effect on January 1. These sanctions take the form of a food embargo and higher duties on Ukrainian goods that Kiev estimated would cost the country as much as $600 million annually. The EU had sought, unsuccessfully, to avoid this outcome.
The sanctions were also linked by Moscow to Ukraine’s adoption of Western economic and financial sanctions against Russia as well as Moscow’s abandonment of the notion of having special conditions carved out under the Association Agreement (which were not on offer). That said, for months Moscow has explicitly linked any signing of the Association Agreement with such sanctions. The two countries previously had a free trade agreement, as former CIS states.
One of the most significant aspects of this is the signal that Moscow is sending to other countries in the region that an actual cost does accompany “choosing the EU over Russia,” which is how Moscow views decisions by countries in its near-abroad to pursue EU membership. Serbia, for example, also has a free trade agreement with Russia and is in the process of pursuing EU membership. Other countries with similar aspirations that also hope to maintain relations with Moscow are being forced to grapple, politically and economically, with this “zero sum” equation that Russia is reinforcing. The Kremlin is seeking to make sure this choice involves a significant cost, at least for some constituency within these countries.
In this latest step, Moscow is seeking to make good on past threats and demonstrate to those watching that choosing the EU truly does equate to penalty in the economic and financial threat domain.