Kiev invents new forms of cooperation with the EU to become at least half a step closer to the cherished integration into the family of European states and NATO
The deputy prime minister for European and Euro-Atlantic integration of Ukraine, Olha Stefanyshyn, said in an interview with the European Truth magazine that it was necessary to create a common economic area with the EU. This would allegedly open Ukraine full access to European markets.
“We have to enter a more ambitious format of dialogue with the EU and talk about creating a single economic zone. That is not just a free trade zone, because we already have that under the association agreement. Instead, we are striving for a common economic space, the ideology of which will be based on full access to all four EU freedoms (free movement of goods, services, labour and capital). This is a different ideology and religion – building a single market with the EU”, Stefanishina said.
She said that in early 2022, Kiev intends to start a dialogue on joining the EU Convention on Joint Transit, which will help fight shady, grey imports. “We are also completing by the end of the year the second phase of assessment under the ACAA agreement (industrial visa-free regime). And directly at the summit we will start political negotiations to conclude this agreement,” she added. Stefanyshyna also said that the Ukrainian government is preparing proposals for revision of quotas within the framework of the agreement on a free trade area with the EU and for inclusion of new positions in it.
It is obvious that new forms of trade relations, even if they are established, will not have much impact on the current situation, which is rather strictly regulated by the association agreement with the EU. Even though the EU’s share of Ukrainian exports is 40%, the restrictions and quotas imposed by the agreement have led to a massive closure of businesses and increased imports of European goods. Ukrainian products have become uncompetitive, as manufacturers are unable to meet European standards.
This requires expensive equipment, which Ukrainian businesses cannot afford to buy. In addition, it requires an extended legislative framework, which does not exist even in the draft.
Moreover, the agreement specifies explicitly that in the event Ukrainian industry disturbs European industry, export restrictions will be imposed. In other words, there can be no equality of partners. Even after the Free Trade Zone agreement came into force, billionaire Yuriy Kosyuk said the following: “This is a deception of Ukraine, in fact there has been no opening of markets… Europe talks about a free trade zone with Ukraine, and at the same time a bunch of exceptions and restrictions were signed for the export of Ukrainian goods.”
In essence, Ukraine has voluntarily surrendered a large part of its sovereignty and opened its trade borders to cheap European products (of Chinese origin). Ms. Stefanyshyna’s dream of full access to European markets is unlikely to come true for one simple reason: the quality of Ukrainian goods will not allow them to pass numerous European regulations. So there will be nothing much to show. But even if they manage to get their products up to the required standards, the clause in the agreement restricting the export of competitive Ukrainian goods puts an end to any hopes for real free trade. There can be no single economic zone, because from the very beginning the Ukrainian economy is a second-rate and deeply peripheral one.
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