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Ukraine – EU: cooperation that has never become either mutually beneficial or equal

The Committee of the Verkhovna Rada of Ukraine on Economic Development has recognized: the economic part of the Association Agreement between Ukraine and the EU is unprofitable for the Ukrainian side, and during the operation of the free trade zone with the EU, Ukraine was unable to compensate for the damage from the loss of the Russian market. At the same time, the parliament recognizes that Ukraine exports its raw materials to Europe, and mainly imports high-tech products.

Actually, MPs voiced what the politicians from the OPPOSITION PLATFORM - FOR LIFE party have been warning since 2012. Ukraine has not been able to integrate into the European economic space as an equal partner, but having chosen the dubious path of rapprochement with the West, it has lost its traditional (and, most importantly, promising and capacious) sales markets for our producer – Russian and the countries of the Customs Union. And this despite the fact that we have repeatedly held conferences and round tables, arranged expert discussions, more than once at all levels explained the threats and risks of Kyiv’s introduction of a free trade zone with the EU, provided calculations of projected direct and indirect losses to the state.

Today there is no longer any doubt that the FTA with the EU is the biggest strategic miscalculation of official Kyiv, the choice of the western vector of foreign economic integration was wrong, and the once PR-ed free trade zone with the EU, as I warned, became only a zone of deception and discrimination of Ukrainian interests.

For example, the continuing negative trade balance demonstrates the asymmetry of the FTA with the EU. According to the State Statistics Service, at the end of 2020, Ukraine supplied goods worth USD 18.6 billion to the EU, while European products were imported to our country for almost USD 23.5 billion. In January-August 2021, goods exports from Ukraine to EU countries amounted to USD 16.8 billion in monetary terms, and imports to Ukraine exceeded USD 17.9 billion.

Moreover, due to the high level of subsidies by the European Union for the exports of their goods to Ukraine, European manufacturers are squeezing out our domestic producer not only from foreign markets, but also from the domestic, Ukrainian one. Even in the niches of food products which are traditional for Ukrainian companies, competition from European manufacturers is increasing. For instance, the situation in the segment of dairy products and cheeses is very indicative, where imports from the EU are gaining more and more positions.

The promised replacement of the Russian sales market by the European one did not happen. And the absurd attempts to establish trade with Africa, South America and the Middle East, presented by the authorities as a unbelievable success, are crumbs in terms of trade turnover compared to the opportunities and markets for finished products lost in 2014‒2016.

As a result of this geopolitical scam, spurred on by Western curators and moneylenders, Ukraine has turned from a major player on the economic map of the world into a raw material appendage of the West and a supplier of cheap labor to developed countries. Over the years of the FTA with the EU, Ukraine has undergone a regression in all areas and spheres and plunged into the deepest economic crisis. The industry has degraded. High-tech production stopped due to the loss of sales markets, lack of investment, as a result – lack of money and technology and, which is extremely important, being unable to compete with European companies either on the European or on the domestic market.

Apparently, the country suffered not only colossal financial losses. In its development, Ukraine has already been thrown back decades, and its very industrial potential has been virtually destroyed. Not to mention the loss of economic and political sovereignty, which was also a consequence of the short-sighted policy of the Ukrainian authorities aimed at rapprochement with the West.

Ukraine has already paid dearly for the mistakes and miscalculations of European integrators who have put their own political ambitions above national interests. Therefore, today the task of the authorities is not to aggravate the situation by trying to bargain for imaginary indulgences or preferences from the European side, but to immediately and radically change the state of affairs. Official Kyiv should be concerned not with revising the economic part of the Association Agreement with the EU, but with its denunciation and a change in the country’s external economic vector.

Unique geographical location, not yet lost transit status (including for energy resources), the remnants of scientific and industrial potential – what the authorities should pay attention to in the first place and what else could be saved by restoring, for example, industrial cooperation with the Russian Federation, joint ventures, returning to Russian markets before the completion of imports substitution processes there. In a year, it will be too late to even talk about this.

But the current Ukrainian government, mired in corruption scandals, concerned about the establishment of a dictatorship and concealing its own crimes, is unable to think strategically or even soberly assess its actions even one step ahead. Therefore, it stubbornly adheres to the failed tactics of his predecessors. Although this is quite obvious that this refusal to listen to common sense promises the country only another round of socio-economic crisis and further impoverishment of the people.

Viktor Medvedchuk, 

Chairman of the Political Council of

the OPPOSITION PLATFORM - FOR LIFE party

 

 

 

Опубликовано: 5 November 2021
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