Sunday

23rd Jan 2022

Opinion

EU trade relations are key to Ukraine's success

  • Valdis Dombrovskis (center left), executive vice-president of the European Commission and Denys Shmyhal, prime minister of Ukraine in Kyiv for the 30th anniversary of Ukraine's independence. (Photo: European Commission)
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This 24 August marked the 30th anniversary of Ukraine's independence, and I was proud to represent the European Commission in the celebrations.

The European Union is Ukraine's trusted ally on its political and economic journey, with an unwavering commitment to developing closer economic, trade and investment ties.

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The EU-Ukraine Deep and Comprehensive Free Trade Area (DCFTA) is a cornerstone of our partnership. It has brought impressive results during its five years of application: our bilateral trade has grown by more than 51 percent, consolidating the EU's position as Ukraine's number one trade partner.

Ukraine has become the fourth biggest exporter of agri-food products to the EU, to the benefit of Ukrainian agricultural producers.

The story of Ukrainian sunflower-seed oil is a good example of the potential of Ukraine agricultural prowess: after the EU under the DCFTA removed tariffs on this product, Ukrainian exports have more than doubled, reaching €1.2bn in 2020.

But the DCFTA is a "deep and comprehensive" agreement which means that its potential benefits go much beyond trade liberalisation.

Increasingly aligning Ukraine's regulatory framework to that of the EU can boost bilateral trade and increase Ukraine's global competitiveness. It can remove costs and complexities for companies and make Ukraine more attractive for EU and third country investors.

It can also give easier access for Ukraine to global markets, since many trading nations around the world apply EU standards.

Implementing such important reforms clearly pays off. Ukraine is no stranger to going great lengths for its citizens. Its efforts to achieve visa liberalisation bore very concrete results.

To do that took political courage and effort, but delivered outstanding results: Ukrainians can now enter 149 countries visa-free.

Independent leadership

However, there is still some road ahead. In order to improve the business climate and attract more foreign investment, Ukraine must continue to do everything possible to tackle corruption and the influence of oligarchs.

Key institutions must have strong and independent leadership, and be able to do their work free of undue political or economic interference.

We welcome president Volodymyr Zelensky's strong commitment to tackle oligarch influence in Ukraine's political and economic life.

The DCFTA also has a key role to play as a vehicle to support Ukraine's structural and systemic reforms. The potential of the existing agreement should however be fully utilised, notably by aligning with and enforcing the EU acquis.

This is also the perspective from which we approach the ongoing reviews foreseen in the agreement.

As regards further sectoral cooperation with Ukraine, the EU remains committed. In that respect, the Association Agreement can encompass new areas, such as those covered by the European Green Deal.

For example, there are important opportunities in our Strategic Partnership on Critical Raw Materials and Batteries, and the strategic alliance launched last July by signing a Memorandum of Understanding between the EU and Ukraine is a proof of this.

Green Deal

The economic relations between Ukraine and the EU can only thrive and prosper in a world of open trade, driven by stable rules.

The respect and compliance with international trade rules is ever more important today, where protectionist tendencies are on the rise, notably in the wake of the Covid-19 pandemic.

Protectionism is a race to the bottom and benefits no country. We count on Ukraine to work with us to keep world trade open and resilient.

However, as we have seen increasingly in the last years, we now face another unprecedented challenge, that of climate change affecting us all.

The recent floods in central Europe and the severe drought in south-eastern Europe, including in Ukraine, are further evidence that climate change is real and that can only be addressed together.

The European Commission recently published a comprehensive plan to tackle climate change. This is also an opportunity for Ukraine to sign up to ambitious, concrete goals to fight climate change.

The EU remains committed to help Ukraine in this endeavour, in terms of both advice and financial assistance. We will take into account Ukraine's efforts when implementing our strategy.

The focused dialogue on the EU Green Deal and Ukraine Green Transition, which was kick-started last May, is a good platform for this purpose.

Citizens

Ukraine's future lies in the hands of its citizens - the vast majority of whom believe a stronger democracy and a better future are best ensured by greater integration with the European Union.

The European Union stands by Ukraine as a committed and trusted partner. Strengthening our trade ties means strengthening our political ties, moving us ever closer together.

Something that both Ukraine and the EU can benefit from greatly.

Author bio

Valdis Dombrovskis is Executive Vice-President of the European Commission, responsible for economy that works for people, and Trade Commissioner.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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