Until the end of the year Ukraine and China intend to negotiate the text of the agreement on free trade zone. The initiator of signing the agreement made by the Asian country that wants not only to increase the volumes of supply, but also to take in Ukraine, some of its productions.
China is interested in expanding cooperation with Ukraine, said the Ambassador of China Du Wei. “The Chinese side has proposed working-level ambitious goal — the creation of Ukrainian-Chinese free trade zone. I hope to intensify research this issue with the Ukrainian side,” he said.
Initiative like the Ministry of economic development and trade of Ukraine. Trade with China is strategically important for Ukraine, said in an official statement of the Ministry. For example, the statement by results of 2015 among our trading partners, China ranked second in terms of turnover in the world and first place among the countries of the Asia-Pacific region. For example, six months of 2016 the total trade turnover between the countries increased by 0.8% compared to the year 2015 to $ 4.3 billion the text of the final document can be approved by the end of this year.
A disadvantage
Over the past two years, the Ministry of economic development and trade of Ukraine is working to increase exports, which will allow to equalize the trade balance and attract foreign currency into the country. But the results are not encouraging.
According to Ministry of economy, during the first eight months of the year, Ukraine sold goods and services to $22.7 billion, which is approximately 9% less compared to the same period last year.
For comparison: the volume of imports during the same period decreased by approximately 0.9% to $24.2 billion Considering that the fall of Ukraine is actively importing coal and gas, the average annual statistics for the supply of goods will not be better. Negative balance of trade puts pressure on the hryvnia.
Export growth is hampered by several factors. Chief among them is the fact that Ukraine supplied abroad primarily raw materials.
In eight months, according to Ministry of economy, the most exported agricultural products and food industry (40.1 percent), metallurgy (23.9%) and engineering (12%).
Their prices depend on world markets. Moreover, foreign companies are doing for the growth of the supply of relatively inexpensive raw materials. For example, for the past three years, the company from Switzerland support the entrepreneurs who are engaged in gathering mushrooms and berries in the Carpathians.
The agreement on free trade zone with the EU, which entered into force on 1 January this year, has failed to improve the situation. According to the state statistics service of Ukraine, in January — August, EU countries exported goods worth $8.6 billion (an increase of 4.4%), while imported $10.6 billion (growth by 6.6%). For comparison, in the CIS countries during the same period of the goods sold 3.8 billion, which is by 27.8% less compared to January — August last year.
Export growth in the EU is hindered by the fact that Ukrainian producers are not able to quickly arrange all the permits for export of their products to the markets of EU countries, and for many groups of goods have a minimum quota.
In January — February, the producers have exhausted their annual limits on the supply of honey, juice and corn, and in March — sugar, barley cereals and flour. “The question of their increase is not discussed until, until you have resolved the issues with the British exit from the European Union”, — said a source in the government.
Alternative country
In 2016, these trends are augmented by the introduction of Russian embargo on Ukrainian food products, complication of transit through the territory of Russia. From July 1, Russia was further strengthened, the report said the Ministry of economy.
The European market can not, even in the future to replace the CIS market, the only hope for Egypt, China, India and Turkey, the President of the Ukrainian analytical center Alexander Okhrimenko.
“These countries are truly our saviors in this difficult time for the country,” he says.
Will the Ukraine the creation of zones of free trade with other countries? Ukrainian economists are sceptical about it. “External trade with China is the greatest failure. Exports fell by 26%, while the trade deficit in goods with China reached $2.9 billion in the first half,” recalls managing partner of Capital Times Eric Naiman. The past six months, Chinese businessmen are actively working in Ukraine and are considering to move their factories to this country. The average wage in the Ukraine is several times lower than in China.
The situation is similar with Canada, with which a free trade agreement signed in July this year. The size of the quotas, as in the case of the EU, is very low. Negotiations with Turkey have been delayed due to a rapprochement with Russia, but Israel is in no hurry to open their markets. Ukrainian exporters will likely have more actively to open up new country for the delivery of their goods.
