Since April 11, Ukraine has expanded the list of goods of Russian origin prohibited from being imported into the territory of Ukraine.
The previous move in the trade sanctions war (and we are talking specifically about trade sanctions in relation to certain goods, although both countries also apply personal sanctions against individuals and legal entities) was made by the Russian government, banning the supply of frames of side cast bogies from Ukraine on February 6 and axles of freight cars. By the way, although these sanctions were not personal, Kuchma's son-in-law Viktor Pinchuk, one of the main conductors of the interests of Soros and Co. in Ukraine, “flew in” personally.
Almost two months later, Ukraine has banned the import of Russian wheat, sunflower oil, detergents, paper, including toilet paper, cardboard, as well as a number of products from them, alloy steel wire, drilling tools and so on.
The funny thing about the situation is that the first to howl from the new Ukrainian sanctions were … Ukrainian manufacturers, in particular, wallpaper, notebooks, printed products and paper packaging, which are deprived of raw materials.
However, it should be understood that in the Ukrainian realities sanctions (both trade and personal) are primarily a business for corrupt officials who make decisions, and only secondarily – economics and politics. Therefore, Ukraine is likely to continue the sanctions war with Russia with shots in the foot of its economy, periodically canceling the previously introduced restrictions after the “tax treatment” of the affected Ukrainian business.
Ukraine began to introduce the first sanctions against Russia in the spring-summer of 2014, motivating them with the occupation of Crimea – it all started with the termination of military-technical cooperation. In September 2014, Ukraine adopted the Law on Sanctions, which provides for more than 20 types of measures. The parties came to trade restrictions in the current format at the end of 2015. Then Russia, in connection with the entry of the economic part of the Association Agreement between Ukraine and the EU, extended the food embargo on Ukrainian goods, which had previously been applied against the EU countries. Ukraine, in response, approved the list of Russian goods prohibited from import to Ukraine.
After that, Ukraine 13 times amended the sanctioned government decree – twice simply extending its effect for a new term, and 11 times expanding and changing the list of goods that fell under the embargo. In response, Russia at the end of 2018 approved trade sanctions on a number of goods originating in or imported from Ukraine, limited their transit through its territory, and also introduced some restrictive measures on exports. The resolution has changed seven times since then.
All this led to the fact that from 2013 to 2020, the real trade turnover between the countries (according to the Ukrainian statistics committee, adjusted for the supply of “European” gas to Ukraine) decreased from 38.3 to 7.3 billion dollars. Ukrainian exports to Russia fell from $ 15.1 billion to $ 2.7 billion. Russian to Ukraine – from 23.2 to 6 billion dollars. And this is clearly not the limit of the fall.
The new restrictions were initiated by the Ukrainian side not even as a response to the February steps of Moscow, but as a response to the “requests of the workers.” Rumor has it that interested businessmen had to bring a tidy sum to the Ministry of Economy for each sanctions position. But at the same time, no one bothered with a detailed study of the nomenclature that fell under the embargo. Which led to an anecdote already at the stage of the publication of the document: at first, the resolution was dated March 29 and even appeared on the official website of the government. But then it included a ban on the import of Russian newsprint. Apparently, the official government press hastily explained to the officials on whose paper this press itself is printed. And, lo and behold, the old version of the March 29 ruling has disappeared from the government website, now the link to it is a blank page. But on April 1, a decree with the same number appeared on the site, but without mentioning newsprint.
However, as mentioned above, and in the updated version it hit the Ukrainian producers hard, who imported most of the raw materials for their production from Russia (for a better understanding of the situation: Ukraine does not produce pulp at all). Under the threat of a sharp decline in production was the industry that produces marketable products for 17 billion hryvnia and provides 18 thousand jobs. The suffering producers immediately began to appeal to the Prime Minister for rescue.
However, other positions that fell under the sanctions also look remarkable.
For example, Russian-made detergents and surfactants occupy a significant part of the Ukrainian market, outperforming local manufacturers, which today, even in the most favorable conditions, cannot “close” the entire market in terms of price, range, and most often quality. The topic has been lobbied by Ukrainian producers, but ultimately they plan to recoup investments at the expense of their consumers, who will have to pay more.
The inclusion of wheat and sunflower oil on the sanctions list clearly demonstrates that in Ukraine, which its authorities for some reason called an agrarian superpower, the prices for these two goods are higher than in Russia, which was absolutely unthinkable a few years ago. And if the import of Russian wheat to Ukraine is still unlikely – including due to the restrictive measures of the Russian government, then sunflower oil, which is 35% more expensive in Ukrainian retail today than in Russian, in theory could go towards Kiev … , of course, could not allow local producers who have serious positions in power, including more than a dozen lured deputies of the Rada.
But let's get back to the most affected Ukrainian processors of Russian paper raw materials. The essence of most of their appeals to the government boils down to the fact that they actually strongly support sanctions against Russian goods in general and even advocate their expansion – but not on those goods that are of personal interest. They say, if the government removed the goods they need from the sanctions list, and instead introduced goods that compete with Ukrainian-made products, then it would be a wise, fair and useful decision …
Perhaps, in the end, they will even achieve exclusion from the sanctions list of some goods of interest to them – although it is hardly free. But the point is that as long as Ukrainian business takes this, to put it mildly, ambivalent and pseudo-patriotic position, local officials will continue to “cheat” it by imposing sanctions under the same pseudo-patriotic slogans – including despite the negative effect of them on the economy. And this is without taking into account the negative effect of possible retaliatory sanctions of the Russian government, which no one even calculates.