Embassy of Ukraine in the United States of America

6, Kyiv 15:57

Free trade agreements (FTA)

An important task of the Ministry of Foreign Affairs of Ukraine is to provide diplomatic maintenance and assistance in holding negotiations on concluding bi- and multilateral free trade agreements (further - FTA).

The FTA conclusion provides the creation of favorable conditions for development of trade and economic cooperation with the certain states or groups of states and therefore is the efficient instrument for increasing the Ukrainian export volume through the liberalization of access of goods and services on foreign markets. The establishing a free trade regime with the perspective trade and economic partners allows Ukraine to diversify geography and range of national export production due to liberalized terms of market accession in the long term.

First of all, the FTA conclusion pursues the aim of advance and protection of economic interests of the Ukrainian producers and exporters and also provides balanced tariff policy, including, in relation to sensitive groups of industrial and agricultural goods which have to become a basis of creating favorable conditions for the development of commerce and economic cooperation.

The valid FTAs

Ukraine concluded free trade agreements with The European Free Trade Association (EFTA), the CIS and also with Montenegro, Macedonia, Georgia, Azerbaijan, Uzbekistan, Tajikistan, Turkmenistan.

Creation of Deep and Comprehensive FTA between Ukraine and the European Union is provided by the economic part of EU- Ukraine Association Agreement, which was signed on June 27, 2014.

The Agreement on free trade between Ukraine and the states of EFTA (Switzerland, Norway, Iceland and Liechtenstein) was signed at Reykjavík (Iceland) on June 24, 2010; ratified by the Law of Ukraine No. 4091-VI of December 07, 2011 and came into force on June 1, 2012. The present Agreement covers trade in goods (industrial, agricultural, fish and sea production), services and settlements of disputes. Given the difference between economic and social development levels of Ukraine and EFTA member states the agreement provides the principal of asymmetrical obligations of the Parties which allows Ukraine to adapt its trade with the EFTA states with the free trade terms.

Two more documents were signed in the scope of Agreement in order to render technical and financial assistance to the Ukrainian Party for adaptation to the new terms of trade, namely: the Memorandum of understanding concerning the Program of bilateral cooperation in agriculture between the Ministry of Agrarian Policy and Food of Ukraine and the Swiss State Secretariat for Economic Affairs; and the Joint Statement on cooperation in the field of fisheries between the State Agency of Fisheries of Ukraine, the Ministry of Fisheries and Agriculture of Iceland and the Ministry of Fisheries and Coastal Affairs of Norway.

CIS Free trade Agreement (member countries: Ukraine, Azerbaijan, Belarus, Armenia, Kazakhstan, Kyrgyzstan, Moldova, the Russian Federation, Tajikistan, Turkmenistan, Uzbekistan) signed on October 18, 2011 and ratified by Ukraine on July 13, 2012.

Besides, bilateral FTAs between Ukraine and Azerbaijan (was ratified on July 12, 1996), Uzbekistan (November 04, 1995), Tajikistan (July 06, 2001) and Turkmenistan (November 05, 1994) are valid. The largest trade partners of Ukraine within the CIS are Russian Federation, Belarus, Moldova and Kazakhstan.

The free trade area between Ukraine and Georgia is valid since 1996 under the Agreement between the Government of Ukraine and the Government of Democratic Republic of Georgia on January 09, 1995 (came into force on June 04, 1996), and also under the intergovernmental Protocol on modification and additions in the Agreements specified on June 17, 2009 that is connected with Georgia's withdrawal from the CIS.

The Agreement on free trade between the Government of Ukraine and the Government of Montenegro was signed at Kiev on November 18, 2011 and  was also ratified by the Law of Ukraine No. 5445-VI of October 16, 2012; became effective on January 01, 2013. The present Agreement covers trade in goods, services and settlements of disputes. Under the terms of the Agreement after the entry into force, Montenegro provides abolition of the import duties. Thus, for the purpose of prevention of potential negative consequences for the economy of Ukraine, the Ukrainian party within the Agreement excluded a number of sensitive groups of agricultural goods from the free trade area. Also, the right for application of export duties by Ukraine according to the existing obligations within the WTO is kept.

The Agreement on free trade between the Republic of Macedonia and Ukraine was signed at Skopje on January 18, 2001 and was ratified by the Law of Ukraine No. 2599-III of July 05, 2001. The present Agreement covers the removal of trade restrictions in industrial and agricultural goods, providing conditions for the fair competition in trade, creation of conditions for further investment promotion, development of joint investment projects, and also protection of intellectual property and cooperation between the Parties in the markets of the third countries.

The concluded FTAs promote the free movement of goods and services between the countries that, in turn, promotes attraction of investments, reduction in cost of import, development of domestic production and infrastructure, exchange of experience and technologies, provides employment of the population, receipt in budgets of taxes and fees and maintenance of close interstate connections.

The negotiation processes under way

For the time being, negotiation processes on the conclusion of bilateral FTAs between Ukraine and Canada, Turkey and State of Israel are under way.

The work on determination of economic expediency of the conclusion of FTAs with other important trade partners of Ukraine is being conducted. Along with the carrying out the corresponding scientific researches we try to define the perspective countries for the FTAs conclusion through the consultations with business associations and leading producers and exporters of Ukraine.