EU prolongs unilateral free trade regime with Ukraine till end-2015

Макроэкономика 24.10.2014 The European Parliament voted on Oct. 23 to prolong its unilateral free trade regime with Ukraine until the end of 2015. In April 2014, the parliament approved a temporary introduction (till the end of October 2014) of a unilateral free trade regime with Ukraine, according to which Ukraine received all the benefits from the Ukraine-EU Deep and Comprehensive Free Trade Area (duty-free exports of some goods to the EU while maintaining tariffs on EU imports), which was planned to be signed later this year. Yet opposition from the Russian government prompted the EU and Ukraine to postpone the introduction of the bilateral trade area. Instead, the EU agreed to Ukraine’s request to prolong its unilateral removal of trade barriers till end-2015. Alexander Paraschiy: The decision was broadly expected, despite opposition from ultra-right EU parliament members. It will allow Ukraine to buy more time to adapt its domestic laws and regulations to EU standards to be eligible to fully benefit from a newly available EU market. Meanwhile, the effect of an “opened” EU market for Ukrainian goods is barely visible currently. For instance, in August 2014, exports of Ukrainian goods to EU countries increased just 11% yoy (or USD 125 mln yoy), which did not compensate a 38% yoy decline in exports to Customs Union countries (by USD 582 mln yoy) in the same month.