Olha Melnyk, Head of FTC Department: our country has the potential to develop and be competitive

11 Sep 2018, 08:55
According to the materials of the Polish-Ukrainian portal

A year ago, on September 1, 2017, the Association Agreement and Free Trade Area (FTA) between Ukraine and the EU began to work. Temporary implementation of the accord started on November 1, 2014. The head of the Department of Foreign Trade and Customs of Lviv Polytechnic National University, Doctor of Economic Sciences, Professor Olha Melnyk told Polukr.net that over the last year there was a marked increase in trade between Ukraine and the EU, as well as an increase of processed products that our country sells to the European Union.

– Currently Russia remains the leader of trade turnover with Ukraine, but Poland is on the second place. The Association Agreement has maximally facilitated the establishment of economic cooperation with Poland. The key goods that Ukraine sells to Poland are iron ore, timber, mushrooms, honey and rolling of ferrous metals. But the main thing for us is the production cooperation: bearings, wires, home appliances are arranged in Ukraine from Polish spare parts and exported to Poland.

The agreement helps to demonopolize the Ukrainian market, the competition is growing. This creates risks for individual domestic manufacturers, but it is a natural process that all countries of Central Europe overcame. Competition is an integral part of a market economy. If the country receives foreign investment, new workplaces are created, new production emerges, and new technologies are introduced. Competition on the resource and commodity markets of Ukraine will be growing. Migration of the work force will stimulate wage growth, and new enterprises with new technologies will encourage higher labor efficiency. Today, the structure of our economy is changing rapidly, as it was 20–30 years ago in the countries of Central Europe.

During the last year we see positive dynamics in trade with the EU. In 2013–2016 raw materials, prefabrication and processed products had almost the same share in the export structure of Ukraine to the EU – 30% each. From 2017, the share of processed products has increased and reached 43% ...

Ukraine can offer competitive products to the EU markets, but they must meet European quality standards. The fact that Ukrainian enterprises are increasing the export of processed products to the EU shows that they comply with the requirements of the European market.

Today in Ukraine there is a process of deindustrialization, but our country has the potential to develop not only due to agrarian, tourism or service sectors. It can be competitive on the world stage only if it has powerful high-tech industry that needs a lot of investment. Foreign investors are wary of investing in Ukraine due to the large number of risks: political turbulence, war, instability, lack of property rights guarantees, etc.