Free trade area

Trade statistics with EU 2017 in figures:

  • EU is the largest trade partner of Ukraine. The EU share in the foreign trade of goods of Ukraine is 41,3%. Total trade volume of goods from EU accounts for 34,7 billion USD.
  • Export of goods from Ukraine to EU is 15,9 billion USD, import of goods is 18,8 billion USD.
  • EU share in the export of goods from Ukraine is 40,3% and in the import of goods is 42,1%.
  • Export of goods from Ukraine to EU is increased by 30,4% as compared with January–November 2016, import of goods is increased by 22,8%.

From January 1, 2016 the Title IV of the Association Agreement between Ukraine and the EU that concerns trade and related questions, including creation of the Deep and Comprehensive Free Trade Area (DCFTA), began to be implemented in the regime of provisional application.

Some changes took place in the sphere of customs regulation, including elimination/gradual reduction of import duties by both parties and administration of origin of goods as well as duty-free tariff quotas.

European side largely liberalized customs regime for the most Ukrainian goods as early as April 2014 in the regime of autonomous trade preferences: the EU’s import duties for 94,7% Ukrainian industrial goods, 82,2% agricultural products and 83,4% food commodities were completely eliminated right away.

Partial liberalization of access to the EU market occurred for the rest of the Ukrainian export through:

1) application of gradual reduction/elimination of the EU import duties during the transition period according to the schedule specified in the Annex I-A to Association Agreement

2) establishing of the tariff quotas providing for the duty-free export within a certain volume (for agricultural and food products).

Ukraine began to eliminate duties for the import from EU since January 1, 2016 – the beginning of the creation of Free Trade Area between Ukraine and EU.

Ukraine apply gradual reduction/elimination of import duties for the import from the EU of a specific sensitive groups of goods within Free Trade Area between Ukraine and EU during the 3-10 years transition period (Annex I-A to Association Agreement).

Ukraine’s rates of import duties which are applied to the import of goods from EU within free trade between Ukraine and EU in 2018 may be examined on the web-site of Ministry of Economic Development.

Also, Ukraine established duty-free tariff quotas for 3 types of goods (pork, poultry and sugar) and envisaged additional volume for 2.

EU is the largest trade partner of Ukraine.

EU share in the general export of goods of Ukraine reached 37,1% in 2016 and 40,2% based on 11 months 2017. The EU share in the general import Ukrainian goods amounted 43,7% in 2016 and 42,2% based on 11 months 2017.

Since the beginning of the DCFTA application trade between Ukraine and the EU demonstrate positive dynamics – regarding export as well as import. Particularly, for 11 months 2017 (January-November) export of goods to the EU increased by 30,4% in comparison with the relevant period of previous year and amounted 15,9 billion USD as well as import of goods from the EU increased by 22,8% and amounted 18,8 billion USD.

Dynamics of trade of goods from the EU, 2014-2017, billion USD

Експорт товарів – Export of goods

Імпорт товарів – Import of goods

Баланс – Balance

According to government statistics

About the third of the export of goods from Ukraine to EU is the agricultural and food products. Export of ferrous metals and the manufactures thereof is on the second place and the products of mechanical engineering (primarily electric equipment) is on the third place.

The fastest growth of the export of goods to the EU in 2017 was being demonstrated by such sectors as agriculture, food industry, mechanical engineering, mineral commodities, metallurgical industry and different industrial goods.

At the same time the production of mechanical engineering (mechanical and electric machines, vehicles), chemical industry and mineral commodities constitute the basis of the import of goods from EU to Ukraine.

Structure of the goods export from Ukraine to countries of the EU-28 in 11 months 2017

АПК та харчової промисловості – Agriculture and food industry

Мінеральні продукти – Mineral commodities

Різні промислові товари – Different industrial goods

Металургійного комплексу – Metallurgical industry

Деревообробна – Woodworking

Хімічна – Chemical industry

Машинобудування – Mechanical engineering

Легка промисловість – Light industry

According to Ministry of Economic Development

Exports of services from Ukraine to the EU increased by 10.8% in 2017 and amounted to 3.3 billion USD. Ukraine mainly exports transport services, material processing services, as well as telecommunication, computer and information services to the EU. Imports of services from the EU increased by 3.4% and ammounted to 2.5 billion USD. Transport, business and financial services account for the largest share of total imports of services from EU countries.

Dynamics of trade in services with the EU, 2014-2017, USD billion

Експорт товарів – Export of services

Імпорт товарів – Import of services

Баланс – Balance

According to government statistics

In Ukrainian exports to the EU there is a positive trend towards the expansion of commodity positions (commodity diversification). Also, the EU market gradually began to enter new companies that had not previously exported to the EU, including small and medium-sized enterprises.

Ukraine has received permission to export to the EU most of the goods of animal origin, including poultry meat, fish and fish products, honey, eggs and egg products, milk and dairy products, collagen, intestinal raw materials, snails, as well as non-food products of animal origin, for example, down, feathers and leathers, technical casein and so on.

As of the beginning of 2018, 290 Ukrainian producers of animal products have already received the right to export animal products to the EU, including 110 producers of food products of animal origin. In 2016, the European dairy market was opened for domestic producers. And in 2017 Ukraine became one of the largest exporters of butter in the EU.

The potential benefits of the DCFTA for Ukrainian producers

  • Duty-free access to one of the most powerful and largest markets in the world for the majority of Ukrainian products (from the first year of the Agreement, the EU abolished import duties on most goods (99% of tariff lines);
  • Equal conditions for competition and increasing exports to the EU;
  • Improving the quality and safety standards of Ukrainian products, including in the domestic market;
  • Creation of Ukrainian brands that will be easily recognized all over the world;
  • Expanding the range of goods and services in the domestic market of Ukraine;
  • Increasing demand for domestic products, including in the markets of third countries, due to the introduction of European standards;
  • Improving the structure of domestic exports in the direction of reducing the raw material component and increasing the share of high-tech products with a high share of value added produced in Ukraine.

The main advantages of European integration for ordinary citizens of Ukraine

  • Improving access to quality imported products;
  • Improving the quality and safety standards of Ukrainian products, including in the domestic market;
  • Improving consumer protection against goods that pose a threat to their health and safety;
  • Cheapening of imported products due to reduction/cancellation of import duty of Ukraine;
  • Expanding the range of goods and services in the domestic market, as well as tourism opportunities.