According to an investigation, this number comprises 47% of the total Ukraine’s products deliveries to the EU countries in 2019.
The trade-economy part of the Association Agreement (AA) with the EU is profitless for Ukraine and requires revision – this is the concluded by the study provided by State Research Institute of IT Development and Economy Modelling jointly with Centre of Market Economy Development (CMD Ukraine).
The study materials have been presented at the talks Strategic Guidelines for Deepening Trade and Economic Relations between Ukraine and EU under AA in Verkhovna Rada (the parliament) sponsored by VR Committee on Economic Development.
The authors of the report note that there is a share of agricultural commodities (corn, wheat, rapes, mill cake, soya beans, etc.) and mineral resources like iron ore raw materials growing in the structure of Ukraine – EU export. Simultaneously the hi-tech sector companies’ export is shrinking, namely: instrument manufacture, machine building, and chemical industry.
The share of mechanic engineering in the EU-bound export in 2019 amounted to only 14.4%, while almost a half of this volume is occupied by the wire assembly sets mainly exported by the EU car makers’ daughter companies.
At the same time the goods import from the EU is crowded with tricky and hi-tech machine building products like cars and trucks, mobile phones, isolated electric cables and isolating fittings, fuel rods, grain combine harvesters, fertilisers, plant protection agents, pharmaceuticals, etc.
That’s why the trade balance of Ukraine and the EU remains negative for the former: the outcome of 2020 showed the import from EU to prevail the export from Ukraine to EU in monetary terms by 4.3Bn USD.
It is pointed out that the negative for Ukraine result has resulted from the trade and technical barriers faced by Ukrainian manufacturers during their efforts to enter the EU market. These are the anti-dumping, compensational, and special dues, requirements of additional certification, accreditation, and so on and so force.
Moreover, the quotas for duty-free import for Ukrainian products provided by AA are miserable, as the report underlines.
Therefore, the unemployed potential of goods to be exported from Ukraine to the EU reaches 9.7Bn USD. To the report authors’ opinion, this potential is actually much higher, as soon as it is evaluated grounding on the existing commodity-based structure of the Ukraine-EU export. Whilst the most prospective sectors for the structural re-building of the Ukraine-EU export are machine-building, car-making, manufacturing of electric machines and equipment, as well as some particular fields of the black metallurgy, military industrial complex, polymer materials production.
One of the report authors Igor Guzhva, the head CMD Ukraine, has noted that the EU is a large and well-solvent market struggled for by most of the world.
“Hence, AA can provide an additional competitive advantage for Ukraine. To achieve better results in the EU markets is to produce special skills, entrepreneurial knack and strong government partnerships. This is primarily about the need to develop in Ukraine, by analogy with the EU, financial, fiscal and institutional incentives for the competitive production and exports”, stressed Mr Guzhva.
https://cfts.org.ua/news/2021/07/06/ukraina_mozhet_uvelichit_eksport_v_es_na_97_mlrd_dollarov_issledovanie_65630