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Economic policy of Ukraine  »  Ukraine-EU cooperation  »  The EU-Ukraine Association Agreement  »  Working group for creation of the free trade area

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Current status of negotiations within the framework of the Working Group for the Creation of a Free Trade Area версія для друку RSS facebook
09.09.2011 | 17:12 |

Currently, negotiations between Ukraine and the EU on the creation of a free trade area are held within the framework of a separate Working Group as part of negotiations on the EU – Ukraine Association Agreement.

Official start of negotiations between Ukraine and the European Union on the creation of a free trade area took place on 18 February 2008 in Kyiv.

Provisions concerning creation of free trade area must become an integrated core part of the future European Union – Ukraine Association Agreement.

Official negotiations are held within three blocks:

-                                                goods trade block;

-                                                services, company foundation, investments, movement of capital, and payments block;

-                                                trade rules block.

 

in the following 18 areas:

1.                                            Tariff proposals

2.                                            Goods trade

3.                                            Technical barriers in trade

4.                                            Trade protection instruments

5.                                            Sanitary and phytosanitary measures

6.                                            Promoting trade and cooperation in customs sphere

7.                                            Combating fraud

8.                                            Goods origin rules

9.                                            Trade relations in energy sphere

10.                                        Services, company foundation, investments, movement of capital, and current payments

11.                                        Intellectual property rights

12.                                        Geographic marks

13.                                        Competition policy: antimonopoly measures

14.                                        Competition policy: government assistance

15.                                        Public procurements

16.                                        Trade and stable development

17.                                        Transparency

18.                                        Dispute settlement

 

The key principles which must be included in the Free Trade Agreement between Ukraine and the EU are as follows:

§               the Free Trade Agreement must be built on the WTO principles. The key WTO principles include protection of the national economy through tariffs, tariff binding, and ensuring the most-favored-nation treatment and the national treatment;

§               receiving access to all advantages of domestic EU market (or substantial approximation to them);

§               stipulation of exact timeframes. The Agreement must stipulate exact timeframes for transitional periods for gradual liberalization of trade relations, and provide for specific terms of abolishing all restrictions. It will help in taking active measures during the transitional period;

§               asymmetry, or relative reciprocity. Use of the principle of asymmetry or relative reciprocity in the Agreement is necessary to mitigate and neutralize possible negative consequences from liberalization of bilateral trade. According to the principle of asymmetry, countries with transitional economies have an opportunity to take advantage of the right to preserve stricter trade barriers in bilateral trade with relatively economically developed countries and implement gradual liberalization of national markets by introducing sufficient transitional periods. This approach corresponds to the existing practice within WTO;

§               moratorium on introduction of new trade restrictions. This principle will guarantee ban on application of trade restrictions which could be introduced as part of the trade regime of one of the partner countries and which weren’t stipulated in an agreement.

As of today, there were seventeen rounds of official negotiations including the opening of negotiations per se:

- 2008: 23 – 25 April in Brussels; 7 – 11 July in Kyiv; 20 – 24 October in Brussels;

- 2009: 27 – 30 January in Kyiv; 30 March – 3 April in Brussels; 30 June – 3 July in Kyiv; 5 – 9 October in Brussels; 07 – 11 December in Kyiv;

- 2010: 1 – 5 March in Brussels; 26 – 28 May in Kyiv; 5 – 9 July in Brussels; 4 – 8 October in Kyiv; 6 – 10 December in Brussels;

- 2011: 7 – 11 February in Kyiv; 4 – 8 April in Brussels; 20 – 24 June in Kyiv.

Content of the future FTA will be geared toward achievement of the deepest possible economic integration to which the parties will be prepared, and will have no precedents in the previous practice of the European Union.

Introduction of the free trade regime will take place within the framework of comprehensive and deepened free trade area in the FTA+ format with the emphasis on regulatory cooperation.

The FTA+ format envisages that reduction and liquidation of trade restrictions within free trade area concern not only liberalization of exclusively bilateral trade in goods but also such spheres which the parties have agreed to additionally liberalize as trade in services, foreign direct investments, and public procurements.

Considering the fact that bringing of Ukrainian law and practices into conformity with EU norms and regulations will become an integral part of a deepened FTA, regulations on application of international and European standards and instruments in relevant spheres of cooperation attain special importance.

The negotiation strategy is based on the need to achieve balance of interests. The main principle which Ukrainian delegation uses in negotiation with the European Union on the creation of free trade area is maximum protection of interests of Ukrainian businesses from the point of view of real prospects of accessing EU markets, not just finalization of negotiations by some specific date. In other words, rapid progress of negotiations depends, first of all, on the real prospects of accessing the markets of goods, services, and capital.

After 17 rounds of negotiation the parties have reached principal agreements in such spheres as promotion of trade and cooperation in customs sphere, goods trade, protection of intellectual property rights, competition: antimonopoly law and concentration, and government assistance. Provisions of the following sections were preliminarily finalized: ‘Transparency’, ‘Administrative cooperation in customs sphere’, ‘Goods origin rules’, ‘Dispute settlement’, ‘Public procurements’, ‘Technical barriers in trade’. Discussion of the ‘Trade protection instruments’ and ‘Sanitary and phytosanitary measures’ sections is almost complete.

At the same time, there is a number of issues which belong to the sphere of special interest of negotiating parties and require additional concentration of their efforts. In particular, these are liberalization of tariffs in goods trade, trade aspects of cooperation in energy sphere, mutual protection of geographic marks, and services trade.

Also, in order to accelerate the negotiation processз the interim working consultations were held at the mutual agreement of the parties on 16-17 May and 11-12 July 2011 in Brussels and on 27-28 July 2011 in Kyiv. During these consultations, the parties have discussed the most principal issues of negotiations between Ukraine and the EU on the creation of a free trade area, in particular, access to services market, abolition of export duties, access to manufactured products market (cars and second-hand items), and trade aspects of cooperation in energy sphere.

At the same time, both parties are intent upon the search of compromise solutions and try to achieve final arrangements to sign the Association Agreement, including the free trade area provisions, in this year.

  In addition, Ukraine will gradually harmonize the national law and implement the necessary institutional changes to increase competitiveness of Ukrainian economy within joint economic space with the European Union.

 


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Розробник: Корпорація "Cофтлайн" (Україна)
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