On Jan. 1, a free trade regime came into effect between Ukraine and the European Union; one month on, there are still rumblings of discontent over conditions. This is because some Ukrainian farmers argue that the quotas were set too low and the duty-free trade volumes have already been exhausted in the first weeks of January.
With the free trade agreement fully in force, most tariffs between Ukraine and the EU will be gradually declining over the next 10 years.
In the meantime, Ukrainian producers can trade duty-free with the 28-country bloc only within quotas of 36 commodity groups, most of which are set to increase by 25-50 percent over the next 5 years.
Business is unhappy with the volume of the quotas, said Taras Vysotskiy, CEO Association Ukrainian Club of Agrarian Business. Nevertheless, export will continue beyond the limited volume but the revenue margin will be lower.
“If we exhausted the EU-set quotas in one month that means that we are able to export 12 times more per year,” Vysotskiy said.
Statistics also show that it is too early for the Ukrainian producers to complain about drawbacks of the association agreement as they have not applied its full potential yet. They used only 30 percent of all their export quotas to the EU in 2015.
The nation’s exporters exhausted the quotas for corn, wheat, processed tomatoes, apple and grape juice, honey, sugar and oats, while 70% of the approved customs-free volume of malt and poultry was sold.
But at the same time there are many goods which the Ukrainian producers use up and continue exporting paying tariff. An example of this is honey, apple and grape juice.
During the first 11 months of 2015, the value of Ukrainian exports to the EU dropped by 24.7 percent compared to the same period of 2014, because while the tonnage has hardly decreased, the prices of commodities – which constitute the core Ukrainian exports – have declined dramatically.
“We’re working with all our trade partners to find ways to increase our exports to EU countries and compensate for the loss of the Russian market,” Natalia Mykolska, Ukraine’s deputy economy minister, said during a briefing in Kyiv.
Source: kyivpost.com
