EU and Ukraine launch free trade agreement negotiations.
European Commission - IP/08/249 18/02/2008
Brussels, 18 February 2008
EU Commissioner Peter Mandelson and Ukrainian President Viktor Yushenko have today launched negotiations for a free trade agreement between the EU and Ukraine. The launch of negotiations followed the finalisation of Ukraine's WTO accession process on 5 February 2008, which was a prerequisite for FTA talks. As Ukraine's largest export market by far, the EU is an obvious partner for closer economic ties that will boost trade and investment.
Launching the talks, Peter Mandelson said: "It’s a sign of the EU's commitment to Ukraine that the ink is hardly dry on its WTO accession agreement and we are here in Kiev to build on that membership with a new stage in our economic relations. The process we are about to begin is not just about trade and investment flows. It is a mark of Ukraine's continuing political and economic integration into the global economy, and deep partnership with the EU".
The EU and Ukraine plan to build on the liberalisation set in train by WTO membership with a wide-ranging agreement that will bring regulatory standards into convergence and improve access for investment in both directions. It will lower the costs of EU imports for Ukrainian businesses and consumers, and increase Ukraine's access to the EU single market, which is the largest in the world.
An EU-Ukraine FTA is part of the EU's wider policy of creating a stable and prosperous European neighbourhood through closer economic ties. The EU is not only Ukraine's largest trading partner, but one of the largest and richest markets in the world. Closer economic ties with the EU offer huge benefits for Ukraine. The FTA will be a core part of the New Enhanced Agreement being negotiated between the EU and Ukraine, which will cover all areas of their relationship.
Ukraine is currently the EU's 25th largest export market and the EU is Ukraine's first trading partner, followed by Russia. EU-Ukraine trade reached over €26 billion in 2006, and has been growing steadily in recent years. The latest figures for 2007 show that this trend is continuing.
Ukrainian exports to the EU consist mainly of basic commodities, i.e. metal, energy, machinery, agricultural products as well as chemicals. Major EU exports to the Ukraine are machinery, chemicals and transport equipment.
The EU is by far the largest foreign investor in Ukraine. FDI flows from EU-25 amounted to €5.5 billion in 2006, compared to just above €230 million in 2003.