The recent "cheese war" between Ukraine and Russia could be followed by a car trade war, Reuters reported on Monday, while commenting on a statement by Ukrainian Prime Minister Mykola Azarov to introduce a so-called utilization fee on Russian-produced cars that are imported to Ukraine.

"Ukraine is preparing to introduce a new tax on car imports in response to a similar move by Russia, the Kyiv government said on Monday, in what could become yet another trade war between the ex-Soviet neighbors," reads the article.

According to the agency, Russia, which must cut import duties on cars after joining the World Trade Organization, this month introduced a so-called utilization fee which analysts say aims to compensate domestic producers for the lower customs duty and protect them. However, Ukrainian producers say the move will effectively raise import duties and add USD 600 to USD 20,000 to the price of Ukrainian vehicles sold in Russia. Russia, which bought USD 344 million worth of Ukrainian cars, buses and trucks last year, accounts for 90% of Ukrainian car exports and 40% of its total output.

Ukraine, in turn, bought Russian-produced vehicles worth a total of USD 453 million last year. If Ukraine also introduces a certain utilization fee, then the Russian cars coming to the Ukrainian market will become USD 1,000 more expensive.

"The two neighbors have already fought a 'cheese war' this year when Russia banned imports of cheese made by a number of Ukrainian producers, accusing them of using cheap ingredients such as palm oil in place of milk fats. Russia has also long urged Ukraine to join its post-Soviet customs union, which includes Belarus and Kazakhstan, offering perks such as cheaper energy supplies and improved market access, but Kyiv has so far refused to do so," reads the article.

Ukrinform