Viche 2015 11

11, 2015

Association Agreement: the chance for success and strength tests

On January, 1, 2016 the Association Agreement between Ukraine and the European Union takes effect. The half of the document is devoted to the creation of the free trade zone. On the eve of the infamous Vilnius summit of Eastern Partnership (November 2013) in Ukraine almost daily the round tables took place, during which the pros and cons of the agreement were weighed. Businessmen, economists and politicians have tried to predict the effects of the opening of Ukrainian and European markets. Most customs will be abolished or minimized. And, despite the fact that the sensitive products, for example, cars, for which it is difficult to compete with the products of Western automakers, a long transition period will be established, during which the import duties on the same European products will be saved, in general, this means that the Ukrainian market will receive cheaper and better quality goods from Europe. Will the domestic business withstand this; will it manage to conquer neighboring markets? Those questions now are very difficult to answer. However, because of the war in Donbas, the critical situation in the economy and political intrigue, the discussion on preparedness for the FTA with the EU has almost stopped. Therefore such changes are coming that will be both challenge and opportunity for domestic business. The economic component of the Association Agreement is over a thousand pages of text. It is impossible to tell all the nuances of a document. So lets focus on major positions of the agreements which economists focus on. The EU Delegation in Ukraine together with the Ministry of Foreign Affairs and the Ministry of Economic Development and Trade issued an information guide EU-Ukraine: deep and comprehensive free trade zone. Using its data and materials of the Ukrainian Union of Industrialists and Employers and a number of analytical centers, we tried to specify what pros and cons the free trade zone with the EU promises.