16:02 May. 12, 2016
A lot of job is to be done before Ukraine starts benefiting from trade agreement with E.U.
Ukraine's free trade agreement with the European Union was so controversial that it caused the former Soviet republic's break with Russia, which had opposed the closer ties with Europe. Several months in, it looks like the deal is benefiting the EU more than it is helping Ukraine.
That doesn't mean it wasn't worth doing. It does suggest, however, that if Kyiv wants to reap the longer term benefits of free-trade, it will need to adopt some changes at home.
Europe and Ukraine started negotiating an association deal in 2008, and it took its more or less final shape by 2012. A year later, President Viktor Yanukovych refused to sign it under pressure from Moscow; President Vladimir Putin wanted Ukraine to join his own pet project, now called the Eurasian Economic Union. Yanukovych's decision gave rise to mass protests in Kiev, and three months later, he was forced to flee the country.
The new pro-European government hastened to sign the deal, which commits Ukraine to bringing its laws and regulations in line with the EU framework, and which lowers or eliminates most tariffs between the two parties.
The trade part of the deal came into effect from January, 2016, and the first data on its implementation are not encouraging for Ukraine. According to the Ukrainian government statistical agency, in the first two months of 2016, the volume of goods traded with the EU slightly decreased, with exports falling more than imports.
I weighted these data by volume and found that the weighted average year-on-year increase in exports to EU countries reached 2.1 percent in January and February; but the weighted average increase in imports was 10.4 percent.