Ukraine in the context of international trade

In most countries international trade represents a significant share of gross domestic product (GDP). Even though international trade has been present through much of our history, its economic, social and political importance has been on the rise in recent times.

In 1991 there was a collapse of the USSR. So, Ukraine as an independent state had to face the problems of participating in international trade. As Ukraine is located on the crossroad of economic routes between the EU and Asia, it has the opportunity to be a transit country and should take this unique advantage.

At present Ukraine’s trade is heavily oriented towards the CIS (Commonwealth of Independent States), especially Russia, Europe, Asia, Africa, the United States – 217 countries of the world. But its major trading partners are CIS countries, the EU nations, Central Europe, China, and the United States. Most imports of oil and gas are from Russia, while imports of technologies are mainly from Western countries and China. Exports consist mainly of raw materials and agricultural goods. Yes, Ukraine is a big exporter of metal and steel, we also export some aircrafts, rockets, cars, software and some other goods but this is not sufficient for a really developed country.

Against this background, membership in the WTO is an economically important step to further support Ukraine’s integration into the global economy. So Ukraine joined the World Trade Organization in 2008, after 14 years of negotiations.

The most significant advantages of Ukraine’s accession to the WTO are:

· increase of foreign investments into Ukrainian economy;

· reduction of tariff and non-tariff barriers to access Ukrainian goods on almost all major commodity markets of developed countries and increase of earnings from exports of domestic products;

· opportunity to protect the interests of Ukrainian producers;

· the membership opens up new opportunities for increased trade with the United States and the rest of the world, the WTO accession will help avoid trade and economic isolation of Ukraine from Western and Central Europe;

· the WTO membership will help avoid the displacement of Ukrainian products from the EU market by similar products in Central and Eastern Europe.

Membership in the WTO is expected to help raise living standards, improve social standards and economic life and increase investment in Ukraine. But membership in the WTO also implies difficult homework. This starts the colossal integration work that lies ahead.

Ukraine’s membership in the WTO will also provide it with an important forum to resolve disagreements with its trading partners, including Russia, which is also seeking the WTO membership. Ukraine supports Russian membership in the WTO as a means to resolve a number of long-standing trade issues, including disputes over steel, sugar, and dairy products.

Ukraine's admission to the World Trade Organization shows that the country is committed to the ideals of economic freedom and democratic progress.

There are also disadvantages.

Enterprises whose activities are focused on the domestic market and those companies that operate according to numerous benefits provided by current legislation of Ukraine but do not meet international practice of the WTO lose the most. Some industries have reduction of production because of increase in imports of appropriate products from other countries.

Nowadays Ukraine is continuing negotiations with the EU on the basis of its entry into free trade zone. Accession to free trade zone is expected to the end of the year 2011.

The EU supports Ukraine’s eventual entry into the EU, but does not believe that Ukraine yet meets the conditions for membership.

Notes: Commonwealth of Independent States – співдружність незалежних держав

to access – мати право продавати

2. What do these abbriviations stand for?

WTO; IMF; IBRD; EU; CIS; FT, FTZ, GDP