President Vladimir Putin has signed a decree suspending Russia's free-trade agreement with Ukraine as of January 1st. Kiev is set to enter a similar trade deal with Brussels the same day.
Putin's decree halts the 2011 agreement, citing "exceptional circumstances that impact Russia's interests and economic security". Moscow has repeatedly expressed concern that Ukraine's free trade agreement with Brussels may flood its market with European goods. Months of three-way talks with the EU to smooth things over have yielded no results.
Ukrainian President Petro Poroshenko said Putin's decision to suspend their treaty was unfortunate. He acknowledged the retaliatory move would cause "damage" to his country's economy. But Poroshenko said he was "ready to pay the price" and press on with efforts to join an EU free trade zone.