Free Trade Area: Ukraine and Europe need each other
The British international trade policy expert, Mark Hellyer spelled out the benefits that EU-Ukraine Deep and Comprehensive Free Trade Area (DCFTA) would bring for Ukraine. In addition he emphisized the next steps that the Ukrainian government and business should take in order to ensure its smooth implementation.
Outlining the main benefits of the DCFTA, Hellyer pointed out that it would allow Ukrainian business to trade more easily with the EU. In particular, it would:
- give better access to a market of over 500 mln consumers;
- help improve the business climate in Ukraine, creating more certainty and transparency and therefore reducing business risk;
- help increase efficiency and competitiveness of Ukraine’s industries;
- provide Ukraine with cheaper and safer products both imported and locally produced.
The British expert also spoke about some specific provisions and implications of the DCFTA for Ukraine, eg:
- in the first year of implementation, Ukrainian exporters will benefit from the removal of 97% of duties on Ukrainian goods and reduction of the average tariff on Ukrainian exports from 7.6% to 0.5%, while Ukraine will reduce its average tariff for European exporters from 5.0% to 2.4%;
- products certified in Ukraine will be treated equally on the EU market.
Ukrainian producers will have 7 years to gradually adopt EU standards and invest in modernisation
Ukrainian business will be able to bid for $2.5 trillion worth of EU public procurement contracts on a par with other EU companies – after it adopts EU rules.
Wide opportunities of DCFTA for European businesses in Ukraine
First of all for foreign investors Ukraine is a huge market outlet with the sheer quantity of its consumers nearly 45.5 million people.
In addition, Ukraine is important for its location, particularly the proximity to both the European Union and Russia. The later makes the country ideal for exporting to Europe, Russia and Asia.
The majority of states from the 28-member bloc are interested in gaining access to Ukraine as it is an energy transit state. The security of EU natural gas supply is reliant on Ukraine as 84% of Russian gas supplies to Europe transit through the Ukrainian gas transportation system.
In addition, Ukraine may act as an exporter of skilled and cheap workforce in the European markets, as it has 22 million of economically active population.