The COVID-19 pandemic has exposed both the strength and fragility of international trade links. Like other countries, Ukraine has appeared at the crossroad of two trends. On the one hand, in response to panic, Ukraine had imposed several protective measures.
Ukraine’s dependence on the market for exports to Russia has been declining drastically since 2011. Until then Ukraine’s exports to Russia, the EU, and the rest of the world had been following similar paths.
According to the Ukrstat, Ukraine exported USD 20.2 bn to the EU, surpassing the previous peak registered in 2008, i.e. before the hardships of two economic crises and the occupation of the part of Ukraine’s territory.
On July 10, 2017, Ryanair, the largest low-cost airline in Europe, announced that it cancels its plans to enter Ukraine due to the failure to sign the contract with Boryspil airport. The decision was a negative blow to the image of Ukraine, which tries to prove that the country is open and friendly to foreign investors.
What exactly does Ukraine sell to the EU? Has the trade structure changed during last three years taking into account multiple factors such as improved access to the EU market, lower global commodity prices, and economic crisis of 2014-2015?
The Association Agreement (AA) between the EU and Ukraine is a complex document covering a wide range of issues from justice to energy, from free trade to sports. Therefore, its impact on the Ukrainian economy will also be multifaceted. For business, the AA means new opportunities, both domestic and abroad.
It is settled that provisional application of Deep and Comprehensive Free Trade Area (DCFTA) between Ukraine and the EU will start since January 1, 2016. In a response, Russia is expected to increase trade barriers vis-à-vis Ukrainian goods.
Today, when we talk about increasing the export capacity of Ukraine, we can hear about the need to focus on exporting the high-tech products, products with high value added and a high level of processing – it seems very attractive because all of the above are important “export benchmarks” which should be strived for.
The delay with the implementation of the DCFTA had caused some concerns that important economic reforms associated with the Agreement could be delayed. However, one year after the Agreement signature, reforms are moving forward.