More than five years after its adoption, Ukraine’s wood export moratorium was found incompatible with the Association Agreement (AA) and not justified under the GATT 1994. Ukraine’s arguments were weak to prove that conservation of forests was the moratorium’s primary goal.
The fifth annual survey of Ukrainian exporters and importers1 marks growing optimism among companies regarding the already achieved AA impact, while their future assessments are marred by uncertainty.
Over the last years, Ukraine has intensified its trade links with the European Union driven by both the positive stimulus provided by the Association Agreement and a negative stimulus, namely the need to replace lost trade links with Russia.
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.
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.
In March, Ukraine’s government adopted the Action plan for reforms in 2015 and 2016 while the IMF board approved four-year USD 17.5 bn extended arrangement under the Extended Fund Facility (EFF). The EFF supports ambitious program of Ukrainian authorities, which would in IMF words ‘put the economy on the path to recovery, restore external sustainability, strengthen public finances, and support economic growth by advancing structural and governance reforms, while protecting the most vulnerable’.
Ukrainian SMEs are poorly represented in the European market and do not expect any significant benefits from the free trade zone between Ukraine and the EU. At the same time, they are relatively less afraid of the possible negative consequences of trade liberalization with the EU.
On September 12, 2014, trilateral ministerial meeting of the EU, Ukraine and Russia produced quite unexpected decision to postpone the implementation of the EU-Ukraine DCFTA (Title IV of the Association Agreement) till January 1, 2016.
To realize where it is better – in Russian or European Union – easiest is to visit any “brotherly nation” like Kyrgyzstan, where you can still see Lenin’s big statue and hear to the Stalin’s mythology that Lenin had an important role in creating of their national identity.
