ECONOMIC INTEGRATION OF UKRAINE: CONTEXT OF THE RUSSIAN-UKRAINIAN WAR
DOI:
https://doi.org/10.35774/jee2023.01.048Keywords:
European integration, structure of international trade, international trade regulations, international assistance, Russian-Ukrainian war.Abstract
Integration with the large market of the EU creates additional competitive advantages for Ukraine. The Association Agreement and the Deep and Comprehensive Free Trade Area (DCFTA), the status of the candidate country and international assistance, which aim to approximate Ukraine’s legislation to EU norms, have become the institutional instruments of such integration. Over the recent years, the European Union has become Ukraine’s main trade and investment partner. The basis of Ukrainian exports to the EU is formed mainly by crops and metallurgical products. The main items of Ukraine’s imports are supplies of machine-building equipment and fuels. In terms of grains and oil crops, Ukraine is the main supplier to the EU. Under the conditions of war, the foreign trade with the EU has proven itself to be robust in volume and, in contrast to other vectors of trade, diversified. This was facilitated by the elimination of a number of tariff and non-tariff restrictions on Ukrainian exports to the EU, as well as the realignment of the logistics infrastructure towards the West. The structure of Ukrainian exports to the EU has seen an increase in the role of a range of agricultural products, along with a sharp decline in the role of metals. On the other hand, the EU has become an important supplier of military products and fuels to Ukraine. Along with that, with the question of security unresolved, the insufficient investment attractiveness remains to be a problematic aspect for Ukraine.
JEL: F14, F15, F35, F51.
References
AgroPolit.com. (2021, Mar 02). Free trade area between Ukraine and the EU in 2015-2020: Exports, imports, quotas, economic achievements and failures [in Ukrainian]. https://agropolit.com/spetsproekty/840-zona-vilnoyi-torgivlimij-ukrayinoyu-ta-yes-u-2015-2020-rokah-eksport-import-kvotiekonomichni-dosyagnennya-ta-provali
Bergmann, J., & Romanyshyn, I. (2022). Rebuilding Ukraine: How the EU should support Ukraine’s reconstruction and recovery (IDOS Policy Brief No. 6/2022). German Institute of Development and Sustainability (IDOS). https://www.idos-research.de/uploads/media/PB_6.2022.pdf
Bilquin, B. (2022, Nov 18). European Peace Facility: Ukraine and beyond. European Parliamentary Research Service. https://epthinktank.eu/2022/11/18/europeanpeace-facility-ukraine-and-beyond/
Directorate-General for Financial Stability, & Financial Services and Capital Markets Union. (2022, Sep 27). Joint statement – Remittances to Ukraine.
European Commission. https://finance.ec.europa.eu/publications/jointstatement-remittances-ukraine_en
European Commission. (n.d.-a). EU assistance to Ukraine. Retrieved February 16, 2023 from https://eu-solidarity-ukraine.ec.europa.eu/eu-assistanceukraine_en#solidarity-lanes
European Commission. (n.d.-b). Instrument for Pre-Accession Assistance (IPA III) – Performance. https://commission.europa.eu/strategy-andpolicy/eu-budget/performance-and-reporting/programme-performanceoverview/instrument-pre-accession-assistance-ipa-iii-performance_en
European Commission. (n.d.-c). Reconstruction of Ukraine. Retrieved February 16, 2023 from https://eu-solidarity-ukraine.ec.europa.eu/eu-assistanceukraine/reconstruction-ukraine_en
European Commission. (2022, Jul 22). Association implementation report on Ukraine (SWD (2022) 202 final). https://www.eeas.europa.eu/sites/ default/files/documents/Association%20Implementation%20Report%20on%20Ukraine%20-%20Joint%20staff%20working%20document.pdf
European Parliament. (2022, Apr 1). EU-Ukraine trade and investment relations and the impact of Russia’s war. https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/639321/EXPO_BRI(2022)639321_EN.pdf
Eurostat. (n.d.). All datasets [Interactive database]. Retrieved February 04, 2023, from https://ec.europa.eu/eurostat/web/main/data/database
Government Portal (2023, Jan 3). Industrial consumers which import electricity from the EU will be provided with uninterrupted power supply – resolution of the Government [in Ukrainian]. https://www.kmu.gov.ua/news/promyslovymspozhyvacham-shcho-importuiut-elektroenerhiiu-z-ies-zabezpechatbezperervne-elektropostachannia-postanova-uriadu
Kiforenko, O. (2022). Ukraine-EU trade relations: Statistical analysis of the total trade turnover. International Journal of Economics and Business Research, 23(1),1-18. http://www.inderscience.com/storage/f121032119786541.pdf
Kinakh, M. (2022, Aug 13). Trade preferences of the EU for Ukraine: Time of new opportunities for exports under the war (in Ukrainian). Yurydychna Gazeta. https://yur-gazeta.com/golovna/torgovelni-preferenciyi-es-dlya-ukrayinichas-novih-mozhlivostey-dlya-eksportu-v-umovah-viyni.html
Latifundist.com. (2022, Dec 21). Several routes compatible with Ukrainian hopper-wagons in Europe are defined [in Ukrainian]. https://latifundist.com/novosti/60500-viznacheno-kilka-marshrutiv-u-yevropi-yaki-sumisni-zukrayinskimi-vagonami-hoperami
Latkovskyi, P., & Marushchak, A. (2019). Problems and prospects of deepening EU-Ukrainian relations. Baltic Journal of Economic Studies, 5(2), 96-103. https://doi.org/10.30525/2256-0742/2019-5-2-96-103
Melnyk, T., Kalyuzhna, N., & Pugachevska, K. (2018). A gravity model of trade turnover between Ukraine and the EU. Baltic Journal of Economic Studies, 4(4), 217-222. https://doi.org/10.30525/2256-0742/2018-4-4-217-222
Ministry of Economy of Ukraine. (2022). The exports to the EU exceed the prewar level – Deputy Minister of Economy Taras Kachka [in Ukrainian]. https://www.me.gov.ua/News/Detail?lang=uk-UA&id=0889ba68-3f13-4118-8ff7-5d040dabcf71&title=EksportVsPerevischuDovonniiRivenZastupnikMinistraEkonomikiTarasKachk
Ministry of Economy of Ukraine. (2023). Bulletin of the current state of the trade relations between Ukraine and the EU [in Ukrainian]. https://me.gov.ua/Documents/Detail?lang=uk-UA&id=14881855-1cfc-4f87-b028-ec6e1914f113&title=BiuletenPotochnogoStanuTorgovelnikhVidnosinMizhUkrainoiuTavropeiskimSoiuzom
National Security and Defence Journal. (2022). Ukraine on its way to the EU: Realia and prospects, 1-2 (187-188) [in Ukrainian]. https://razumkov.org.ua/images/journal/NSD187-188_2022_ukr_full.pdf
Nekhay, O., Delgado, M. C., & Cardenete, M. A. (2021). Does abolishing tariffs in bilateral trade matter for a country’s economic growth? The impact of the EU–Ukraine DCFTA. Europe-Asia Studies, 73(7), 1257-1278. https://doi.org/10.1080/09668136.2020.1807468
Olekseyuk, Z., & Balistreri, E. J. (2018). Trade liberalization gains under different trade theories: A case study for Ukraine. Empirica, 45(3), 507-542. https://doi.org/10.1007/s10663-017-9371-9
Olekseyuk, Z., & Schürenberg-Frosch, H. (2019). Ukraine’s unconsidered losses from the annexation of Crimea: What should we account for in the DCFTA forecasts? Review of Development Economics, 23(2), 877-901.https://doi.org/10.1111/rode.12574
On the Joint Transit Regime and Introduction of the National Electronic Transit System: Law of Ukraine No. 78-IX, suspended as of October 1, 2022. https://zakon.rada.gov.ua/laws/show/78-IX#Text
Sapir, A. (2022). Ukraine and the EU: Enlargement at a new crossroads. Intereconomics: Review of European Economic Policy, 57(4), 213-217. https://doi.org/10.1007/s10272-022-1065-2
Sologoub, I. (2022). Ukraine’s EU integration: A long way home. Intereconomics: Review of European Economic Policy, 57(4), 218-224. https://doi.org/10.1007/s10272-022-1066-1
Welfens, P. J. J. (2022). Key Ukraine-related emigration aspects and EU enlargement risks with Ukraine. In: Russia’s invasion of Ukraine. Economic challenges, embargo issues and a new global economic order (pp. 167-180), Palgrave McMillan. https://doi.org/10.1007/978-3-031-19138-1_10
Welfens, P. J. J., Xiong, T., & Hanrahan, D. (2022). Economic, institutional and power perspectives on EU income redistribution and a Ukraine enlargement (EIIW Discussion paper, No. 325). University of Wuppertal. https://www.researchgate.net/publication/366513116_Economic_Institutional_and_Power_Perspectives_on_EU_Income_Redistribution_and_a_Ukraine_Enlargement
World Bank. (2022). GDP (current US$) – Ukraine [Data file]. https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=UA
World Economic Forum. (2017). The global competitiveness report 2017–2018. https://www3.weforum.org/docs/GCR2017-2018/05FullReport/TheGlobalCompetitivenessReport2017%E2%80%932018.pdf
Yatsenko, O., Reznikova, N., Karasova, N., Musiiets, T., Lavrinenko, O., & Nitsenko, V. (2020). Modernization of the format of Ukraine’s trade integration with the EU in the conditions of implementation of the DCFTA. Problemy
Zarzadzania, 18(90), 101-124. https://doi.org/10.7172/1644-9584.90.6
Received: February 10, 2023.
Reviewed: February 18, 2023.
Accepted: February 21, 2023.
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).