Ukraine and Turkey will ratify the Free Trade Agreement (FTA) in the near future, and after the ratification procedure is completed, the document will enter into force in early 2024, the Economy Ministry said on Wednesday following a meeting between First Deputy Prime Minister and Economy Minister Yulia Svyrydenko and the new Turkish Ambassador Mustafa Levent Bilgen the day before.
“The free trade agreement will also simplify logistics issues, promote the development of Ukrainian business in wartime, and open new prospects in Ukraine for our partners from Turkey,” Svyrydenko was quoted as saying in a press release.
She added that a working group on grain will be set up to discuss global and bilateral trade in this market.
“Ukraine highly appreciates Turkey’s participation in protecting the grain export initiative, which is an important factor in ensuring global food security,” the First Deputy Prime Minister said.
It is noted that the parties are also ready for a constructive dialogue on expanding economic cooperation, in particular, the creation of joint projects in priority sectors of the economy. Strategically important sectors for restoring and attracting private investment are defense, agricultural production and processing, renewable energy, gas production and storage, green metallurgy, environmentally friendly transport, healthcare, and pharmaceuticals.
Svyrydenko added that Ukrainian entrepreneurs are ready to establish joint business with international partners, so the government is using every opportunity to attract additional resources, including for the post-war reconstruction of Ukraine.
“Humanitarian demining is another important area. We need heavy demining vehicles, training for sappers, everything that will help us clear our land as soon as possible. We are open for cooperation and encourage international business to enter Ukraine,” the First Deputy Prime Minister said.
As reported, following 12 rounds of negotiations and a series of expert consultations in 2011-2022, Prime Minister of Ukraine Denys Shmyhal and Turkish Trade Minister Mehmet Mush signed an FTA between the two countries in Kyiv on February 3, 2022. The document will enter into force after ratification by the parliaments of both countries and the exchange of instruments of ratification.
The Cabinet of Ministers approved the draft Free Trade Agreement (FTA) with Turkey at a government meeting on Wednesday.
According to First Deputy Prime Minister, Minister of Economy Yulia Svyrydenko, the agreement will bring an additional 2% of GDP annually.
“The basis of the agreement is the zeroing of duties by Turkey for 10,337 commodity items. This is 95% of the total number of goods. Another 1,348 commodity items will be subject to tariff quotas or duty reduction,” she said, presenting the draft FTA Agreement with Turkey at the government meeting.
Currently, Ukraine exports 1,100 commodity items to Turkey, since Turkey has one of the highest levels of customs protection in the world, she said. At the same time, the level of Ukrainian customs duties is one of the lowest.
“In recent years, we have begun to observe that Ukrainian duties have generally ceased to be a barrier to Turkish goods, while Turkish duties for our goods have been an impenetrable wall for entering their market,” Svyrydenko said.
According to her, Ukraine reserves the right to apply a duty on the export of scrap metal.
“At the same time, Turkey opens the domestic market for our metal. Duties for another 130 commodity items of metallurgy goods have been partially reduced… And additional quotas have been established for 160 metallurgy goods,” Svyrydenko said.
According to her, Ukraine will retain duties on the import of used cars, setting transitional periods of three to five years for vehicles and light industry products. As for the latter, Svyrydenko announced state support in the form of affordable loans for the modernization of equipment for Ukrainian light industry companies.
At the same time, the parties reserve the right to restore the effect of duties through the mechanism of bilateral safeguard measures.
As Svyrydenko said, the review of the agreement shall take place no later than two years later.
First Deputy Prime Minister of Ukraine, Minister of Economy Yulia Svyrydenko and Minister of International Trade, Export Promotion, Small Business and Economic Development of Canada Mary Ng during an online meeting on January 27 announced the launch of negotiations to modernize the Canada-Ukraine Free Trade Agreement (CUFTA).
“Canada and Ukraine will seek to negotiate new obligations in areas, including services, investment, digital trade, labour, and the environment, while advancing an inclusive approach to trade that aims to facilitate new opportunities for small and medium-sized enterprises,” the Ministry of Economy said in a statement.
Ukraine expects to start free trade negotiations with the United States during the visit of President Volodymyr Zelensky to the United States, First Deputy Prime Minister, Minister of Economy Oleksiy Liubchenko has said.
“During the president’s visit to the United States, we want to reach an agreement to start free trade negotiations with the United States,” Liubchenko said in an exclusive interview with Interfax-Ukraine.
In addition, Ukraine has carried out preliminary work to expand the free trade area (FTA) with Canada.
“I hope this year we will complete negotiations on expanding the FTA to include services and mutual protection of investments,” the first deputy prime minister said.
He added that Canada is interested in this, since it has great investment potential, concentrated in private pension funds.
Belarus is ready to resume free trade with Ukraine if the latter reviews its measures on Belarusian goods, Belarusian First Deputy Foreign Minister Alexander Guryanov said.
“We’re ready to fully scrap all our decisions. We’re ready to resume free trade in full. But not before Ukraine has reviewed the measures taken in regard to Belarusian products, whose de facto aim was simply to limit competition from Belarusian manufacturers,” Guryanov said, commenting on a Belarusian government decision to license the import of certain types of goods in order to restrict trade with Ukraine.
His commentary was published on the ministry’s website on Friday.
Earlier on Friday, Ukrainian Deputy Economic Minister and Trade Representative Taras Kachka said that Belarus was about to introduce an individual licensing regime on the import of a number of Ukrainian goods.
“There is information that Belarus has introduced individual licensing of the import of some Ukrainian goods: confectionary products, chocolate, juices, beer, chip and fiber boards, wallpaper, toilet paper and packaging, bricks, ceramic tiles, glass ampoules, agricultural equipment for sowing, washing machines, and furniture. The decision was approved by Decree 292 issued by of the Council of Ministers of Belarus on May 26,” Kachka said on Facebook. The decision will take effect ten months after publication and will remain in effect for six months, he said.
“Such actions are unfounded and discriminatory. Individual licensing means manual management of the import of Ukrainian products into Belarus. The government is holding consultations with manufacturers on dealing with the negative consequences of the discriminatory actions taken by the Belarusian government,” Kachka said.
For his part, Guryanov explained that the Council of Ministers decision of May 26, 2021, to license the import of certain types of goods was due to Ukraine having “recently systematically violated the free trade regime spelt out in the CIS free trade zone law.
“We have all agreed a long time ago that a free trade zone involves free movement of goods. The agreement does not involve imposing any tariff restrictions on members’ products in any form or stipulation. Last December Ukraine stunned Belarus by deciding to impose a de facto duty on certain types of Belarusian metal products under a pretext of supposedly unfriendly and discriminatory steps by the Republic of Belarus,” he recalled.
In May Ukraine’s inter-agency commission for international trade imposed further duties on Belarusian wheel products, and that despite “the Republic of Belarus having supplied, quite efficiently, passenger equipment to various towns across Ukraine by offering flexible financing tools, good prices, good technology. On the one hand, we were puzzled; on the other, this was yet another step which we think is wrong from the standpoint of free trade,” he said.
Belarus has long been analyzing all of Ukraine measures imposed on Belarus, he said. “I can state that, aside from those two examples I mentioned, Ukraine currently has eight anti-dumping and special protective measures in regard to Belarus. They involve anti-dumping duties on matches, starch, construction material, cement, incandescent bulbs, i.e. a whole list of products which falls under restrictions as Belarusian export to Ukraine,” he said.
Belarus repeatedly offered Ukraine (including at the level of the prime minister as a co-chairman of the intergovernmental commission and at the level of the foreign trade regulator, which in Belarus is the Foreign Ministry) holding consultations, using mechanisms to remove barriers, clarifying the sides’ positions, Guryanov said.
“Never once did Ukraine show a desire to respond to our requests and only in isolated cases, already after the decisions were made regarding restrictive measures against Belarus, we were simply told that at some point the Republic of Belarus’ long-time decisions started to be seen as unfriendly and discriminatory and for that reason it became necessary to restrict our supplies to Ukraine,” he said.
Belarus took measures, which effectively limit imports from Ukraine through additional controls, and then only temporarily, as per the international trade rules that are in active use in many countries, he said.
“We are ready for talks any moment. We once worked with Ukraine quite actively to remove barriers to mutual trade. For some reason, now these barriers began to re-appear, not at our initiative,” he said.
During the bilateral consultations “Ukraine hinted that what it saw as unfriendly and discriminatory measures on Belarus’ part were, for some reason, certain decisions made by the Eurasian Economic Union, which is now the responsibility of five countries, not just Belarus,” the diplomat said.
“Yet the counter- or some unfriendly restrictive measures needed to be taken exclusively against Belarus. For the simple reason that we are still not a member of the World Trade Organization. Which apparently means that it is okay to punish us in breach of free trade principles, in breach of international agreements which create conditions for normal competition, for normal export-import operations. So, once again: this is nothing to do with the current souring of our relations, aviation issues, and so on. This is down to the trade negotiations, pure and simple, which were supposed to lead us to remove the barriers, as I exhorted our Ukrainian colleagues to do,” the first deputy minister said.
