Russia and Ukraine signed an agreement on Friday on the duty-free import of Ukrainian steel pipes into Russia at a volume of 260,000 metric tons annually.
The agreement was signed by the ministers of economy of both countries following a meeting between Russian Prime Minister Vladimir Putin and his Ukrainian counterpart Mykola Azarov.
The decision to sign the agreement follows a landmark deal ratified by the parliaments of Ukraine and Russia on Tuesday on extending the lease on a Russian naval base in the Ukrainian port of Sevastopol for 25 years after the current lease expires in 2017 in return for a 30% discount on Russian natural gas for Ukraine.
Russia halted from April 1 the imports of Ukrainian steel pipes duty free over the failure of the two ex-Soviet republics to agree on a quota for the second quarter of 2010.
In February 2010, Russian steel pipe producers, accounting for over 70% of the domestic steel pipe market, requested the government to halt the duty-free imports of pipes from Ukraine starting from the second quarter.
Producers argued the Russian pipe market had narrowed considerably due to the 2008 global economic crisis and the Ukrainian pipe supplies made the production capacities of domestic enterprises underutilized.
Ukraine's metals industry, a major source of the country's budget revenues along with the chemicals sector, views Russia as a vast market for the sale of its products at low prices, something potentially damaging for the Russian steel industry.
In 2009, Ukrainian producers exported 230,000 metric tons of pipes to Russia, while Russian manufacturers have proposed to limit this volume to 217,000 tons.
MOSCOW, April 30 (RIA Novosti)
