Ukraine Could See Exports Rise Under Deal with EUWorld | September 16, 2014, Tuesday // 16:43| views
Ukrainian lawmakers and members of government sing the national anthem in Parliament after the chamber adopted a landmark political and free trade deal with the EU, 16 September 2014. Photo EPA/BGNES
The association accord between the EU and Ukraine ratified on Tuesday offers the former Soviet Union nation increased economic and political ties with the bloc.
At the same time, it would deny Ukraine preferential terms in trade with Russia.
The accord, part of the EU's Eastern Partnership policy, is expected to support Ukraine’s food, textile and steel sectors by giving the country increased access to the single European market of some 500 million consumers.
According to a EU study, Ukraine could see its exports rise by EUR 1 B when the free-trade part of the accord takes effect, while its dependence on Russia’s market will decrease.
The EU and Kiev last week agreed to delay the free-trade aspect of the deal until the end of next year under pressure from Russia and due to the weak state of Ukraine’s economy which would make it vulnerable to a sudden influx of European goods.
Once the free-trade regime between the EU and Ukraine enters into force, Ukraine will lose preferential treatment and access to Russia’s market of 146 million consumers.
Russia and the EU absorbed about 25% of Ukraine’s exports each last year.
To live up to the expectations of the EU, however, Ukraine would have to implement tough reforms that will have a strong political and social impact.
Under the deal, Ukraine will have to meet EU requirements on food safety and product quality and cooperate on other issues such as energy, industry, taxes, tourism, justice system and law
Moscow has warned that transition to EU trade standards would cost Ukraine EUR 165 B over the next 10 years – a sum well in excess of the country’s 2013 GDP.