Brussels,
31 December 2015
On
1 January 2016, the EU and Ukraine will
start applying the Deep and
Comprehensive Free Trade Area (DCFTA) which forms part
of the Association
Agreement, signed in June 2014, and
provisionally applied in parts since
November 2014.
The
application of the DCFTA of the
EU-Ukraine Association Agreement
constitutes a milestone in the bilateral
relationship, as it will offer
new economic benefits to both
sides. Ukrainian businesses receive stable and predictable
preferential access to the largest
market in the world with
500 million customers, while EU businesses will be able
to benefit from easier access
to the Ukrainian
market and build new relationships
with Ukrainian suppliers and cooperation
partners. This will also be
to the benefit
of Ukrainian citizens, as they
will have better access to
high quality products, and increased
competition and the lowering of
import tariffs should lead to
lower prices.
By
its ambitious goals of approximation
to EU legislation in areas such
as competition, government procurement, and protection of intellectual property rights, the agreement will
contribute to the modernisation and diversification of the Ukrainian
economy and will create additional
incentives for reform, notably in the fight
against corruption. The DCFTA will thus offer an
opportunity to Ukraine to improve
its business climate and to
attract foreign investment, helping Ukraine to further
integrate with the world economy.
The DCFTA is foreseen to be
implemented over several years, allowing gradual legislative alignment and time for
all affected stakeholders to adjust.
Commissioner Malmström's
remarks expressed confidence in the
prospects for Ukraine: “The entry into force
of this trade
area on 1 January 2016 creates unique opportunities for Ukraine to
stabilise, diversify and develop its
economy to the benefit of
all its citizens.
Assistance from the EU will be
made available to help Ukrainian
SMEs seize these new opportunities,
to grow, and thereby create
jobs. EU businesses will benefit as
well by gaining
improved access to a market of
45 million people. The change will
not occur over night, it
will require work and investment.
Gradually, the DCFTA will contribute to a prosperous Ukraine and to
stronger economic integration with the EU.”
The
EU continues to stand by Ukraine
by providing assistance and making available advice and expertise,
notably to help small businesses
(SMEs) to grow and to
take advantage of the opportunities
granted by the DCFTA, in particular
regarding the progressive alignment with EU rules. The DCFTA Facility for SMEs will complement existing EU programmes (EU SURE,
SME Flagship) enabling SMEs to be
better equipped to the changes
in the domestic
business environment.
Commissioner Hahn added: "With the DCFTA new opportunities
are opening up for Ukraine
in the EU and beyond, since European
standards are often international standards. The EU will continue to
support Ukraine and help with
the necessary adjustments. We want to see
Ukraine succeed and make use
of the full
potential of the DCFTA".
Background
The EU and Ukraine
signed the Association Agreement with its Deep
and Comprehensive Free Trade Area
on 27 June 2014. The whole Association
Agreement with its Deep and
Comprehensive Trade Area will fully
enter into force as soon
as the ratification
procedures in all 28 Member States
will have been finalised. General provisions and parts of
the political and cooperation association chapters are already being
applied provisionally since November 2014, to which the
trade related provisions (the DCFTA) are now being
added from 1 January 2016 onwards.
EU exports to Ukraine
amount to EUR 17 billion and Ukrainen
exports to the EU equalled EUR 14 billion (data for
2014). Main EU exports to Ukraine consist
of machinery and appliances (€ 5.7bn in 2013), transport equipment (€ 2.6bn), chemicals (€
3.7bn) and manufactured goods. Ukraine's main exports to
the EU are base metals (€ 3.5bn in 2013), vegetable products (€ 2.8bn), mineral products (€ 2.7bn), machinery and appliances (€ 1.2bn).
Independent studies suggest that the
simple implementation of the AA/DCFTA would bring benefits
of ca. 6% of additional Gross
Domestic Product over the medium
term and 12% in terms of
increased welfare for Ukrainians. Much more can
be expected if Ukraine genuinely
implements the reforms foreseen by the Agreement,
as they would
improve the business climate and help to
attract foreign investments and technology transfers.
The EU will continue
its significant support
to Ukraine to support the
implementation of the DCFTA – as for instance in
the area of product regulations,
public procurement, food safety measures,
rules on competition and customs etc. – notably by mobilising
expertise from the EU Member States
to work with
their Ukrainian peers.
In addition, the
EU pays a special
attention to support the private
sector – the small
business at the first place
– so it can
reap the benefits of this
agreement, and generate economic growth and jobs
for Ukraine. Indeed, the DCFTA will affect not
only exporters to the EU, but all companies:
the domestic business environment will also be
progressively aligned with EU rules. These changes will
in the medium
to long-term play out to
Ukraine's benefit, but in the
short-term may be challenging for SMEs, which
may need extra skills and
more financial resources to adapt.
To reply to
these needs, the European Commission
– jointly with the European Investment
Bank (EIB) and the European Bank
for Reconstruction and Development (EBRD) – has put in
place the DCFTA Facility for SMEs.
The Facility will complement the EU programmes in Ukraine that
help small businesses to grow
– such as EU SURE and
the SME Flagship. The
DCFTA Facility for SMEs will receive
for its operations
in Ukraine approximately €100 million of grants from
the EU budget. This contribution is expected to
unlock at least €1 billion of new investments
by Ukrainian SMEs, to be
financed largely by new loans
supported by the Facility. The
funding will:
- Help SMEs to
seize new trade opportunities with the
EU and within the region which
have been opened up thanks
to the DCFTA;
- Improve access to finance for SMEs, enabling them to make
the necessary investments to increase their competitiveness;
- Allow SMEs to integrate
into global value chains by
becoming business partners of foreign
direct investors;
- Enable SMEs to comply with
new food safety, technical and quality standards, as well as
with environmental protection measures, thereby benefiting Ukrainian customers and boosting exports
to the EU and beyond.
European
Commission
http://europa.eu/rapid/press-release_IP-15-6398_en.htm?locale=en
