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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Trade window to Europe has been opened

“Bringing Ukrainian businesses to the European standards will take two to three years”
17 March, 2014 - 17:40
THE PLANNED MEASURES INVOLVING A SET OF TRADE AGREEMENTS WITH THE EU WILL BRING 500 MILLION EUROS PER YEAR OF ECONOMIC ADVANTAGE FOR UKRAINE / Photo by Ruslan KANIUKA, The Day

The European Commission (EC) has decided to unilaterally reduce tariffs on Ukrainian goods before November 1, 2014. The announcement was made by the EC president Jose Manuel Barroso. “The EC agrees and is ready to support Ukraine to stabilize its economic and financial situation,” he said. The EC staff explained that they had decided to make a gesture towards Ukraine by fast-tracking implementation of the Association Agreement’s tariff section using independent autonomous trade preferences instead of waiting for the Association Agreement and the Deep and Comprehensive Free Trade Agreement to come into force. Therefore, Ukrainian producers are already getting preferential access to the EU market under the schedule of concessions which were achieved during the previous negotiations on free trade. It is assumed that the temporary abolition of customs duties on the border with the EU will be complete or partial, depending on the sector.

This is another clear step of the EC towards the new Ukrainian government. On March 6, Heads of state and government’s meeting reaffirmed the EU’s commitment to provide financial aid package to Ukraine amounting to 11 billion euros. “The Commission is moving forward quickly to implement the support package and approved today the first of the planned measures involving a set of trade agreements, which will bring 500 million euros per year of economic advantage for Ukraine. This proposal is a concrete and tangible measure of support for Ukraine by the EU,” Commission President Barroso said about the economic benefit from the simplification of customs at the border with EU. Farmers will benefit most of all, according to experts, who see them getting nearly 400 million euros in commercial benefits.

European Commissioner for Trade Karel De Gucht said that the “idea” behind EC actions was that the EU “will open its doors for Ukrainian exports, helping Ukrainian companies to experience a real boost that will have an impact on the daily lives of all Ukrainians.” But the decision of the EC is not enough. “Such a quick response on the EC’s part has shown that it stands shoulder to shoulder with the people of Ukraine. I would urge the European Parliament and the Council of the EU to speed up the approval process so that the reduction of duties could start as early as June,” the Commissioner said.

Therefore, the final responsibility for giving or not trade preferences to Ukraine lies with the European Parliament. Will its response be positive? According to The Day’s sources in diplomatic circles who spoke on condition of anonymity, there is no real confidence yet. After all, Europe is delaying the introduction of economic sanctions against Russia because of the fact that its 27 member nations lack consensus on this issue. Similarly, there might be no unity when European MPs will vote on the issue of border crossing facilitation for Ukrainian goods.

However, Ukrainian MPs and businessmen are predicting a positive outcome of the vote.

“This is a good move on the part of Europe in the direction of Ukraine. It is to some extent aimed at supporting producers. Indeed, the EC announced conditions will be enforced unilaterally without demanding anything in return from Ukraine. It will benefit our country... This is a move towards meeting Ukrainian economy’s needs which will give a powerful impetus to the development of the whole country in two to three years,” a major shareholder of the group of companies Continuum, independent MP, member of the European Sovereign Ukraine group Ihor Yeremeiev told The Day. According to him, Ukrainian legislation already complies with the European rules. “By November 29, 2013, the parliament approved virtually all the necessary bills, except for two that are not related to goods producers. It is now up to Ukrainian business community to use them,” he said. Truly, opening the trade window to Europe is not just a chance, but also a challenge. For instance, to sell alcoholic beverages in Europe one needs to develop a marketing and advertising campaign, hold it and only then the consumer will start spending his euros to buy a Ukrainian product, Yeremeiev says. Who is now ready to work according to the European rules? “I think there are good prospects for confectionery industry, manufacturers of alcoholic beverages and beer, farmers. The rest should actively implement EU standards in their businesses, conduct international certification, etc.,” he said.

By Natalia BILOUSOVA, The Day
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