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How the export and import of our country changed due to the war and how it is possible to find new trade partners despite the difficult conditions.
The turnover of Ukraine for ten months of the current year has decreased compared to last year. However, even during the war, Ukraine is looking for new markets for its products, and we are succeeding.
Positioning of partners and changes in the structure
According to the information of the State Customs Service of Ukraine, the turnover in ten months of this year reached 81 billion dollars. During this period, Ukraine imported goods worth $44.1 billion and exported $36.9 billion. Compared to the same period last year, exports decreased by 32.3%, imports by 23.9%.
The top three importers to Ukraine include China ($6.6 billion), Poland ($4.4 billion) and Germany ($3.7 billion).
The three leaders in exports from our country include: Poland (5.7 billion dollars), Romania (3 billion dollars), Turkey (2.4 billion dollars).
Compared to last year, there was a change in trade partners. If in 2021 China was the leader, then this year the Celestial Empire did not make it to the top three in terms of exports from Ukraine. This happened mainly due to problems with the logistics of agricultural crops and significant losses in the metallurgical sector of Ukraine.
Instead, the EU countries – Poland and Romania – became the leaders.
Olha Gvozdyova, an expert in international trade, adviser to the director of the State University “Office for the Development of Entrepreneurship and Export”, says that since the beginning of the full-scale war, indicators have changed in terms of goods and countries. Due to logistical problems, exports to neighboring countries have increased, currently the EU accounts for 63%, while exports to other countries have fallen, for example, China has moved from the first place of trading partners to the fourth.
According to the State Customs Service, the most imported to Ukraine were machines, equipment and transport ($12.3 billion), fuel and energy products ($10.6 billion), chemical industry products ($8 billion). The three most exported goods from Ukraine included food products (18.5 billion dollars), metals and products thereof (5.4 billion dollars), machines, equipment and transport (3.6 billion dollars).
Since the beginning of Russia’s full-scale invasion of Ukraine, there have been changes in the structure of exports. If last year metals occupied the first place among the export categories of goods, this year they gave way to the agricultural sector. Thanks to the grain agreement, the share of agricultural and food products in the total export of Ukraine increased from 36% last year to 46% this year. At the same time, the share of metallurgical products decreased from 24% to 16%.
Oleksandr Zhemoyda, director of the Department of Trade Agreements and Export Development of the Ministry of Economy of Ukraine, says that the war has a certain impact on the structure and volume of trade. According to him, today the trade policy of Ukraine has undergone significant changes. Before the full-scale war, trade was formed in such a way that a significant part went by sea, but from March there was a reorientation to land. Currently, EU members are both transit countries and consuming countries.
We are looking for other sales markets
Despite the war, the export potential of our country remains quite high, and we are even trying to find new sales markets.
Currently, according to O. Zemoyda, Ukraine has about 50 countries covered by free trade agreements with varying degrees of liberalization. In addition, we have the full unilateral cancellation of tariff restrictions from the EU, Great Britain, Australia and Canada, which has led to the fact that Ukrainian products are no longer burdened by duties and quotas. Also in 2022, the agreement with Macedonia was updated, and an agreement with Turkey was signed on the eve of the war.
Now the authorities are working on the expansion of the agreement in the field of services with Canada, and agreements have also been reached on technical consultations with Switzerland, Norway, Iceland and Liechtenstein on the subject of balancing the conditions of these countries with the conditions of the EU without preferences, in the standard trade regime. The plans include maximum coverage of the Mediterranean and the formation of a pool of countries in this region for greater expansion of supply chains.
“In such a situation, when Ukraine has wide export opportunities, it is interesting how exports will be restructured in connection with unilateral preferences from some countries. After all, for many countries, agricultural products are a specific aspect of trade formation, countries are trying to protect their domestic market. This aspect will demonstrate the ability of Ukrainian products to win over consumers in the markets of different countries,” O. Zemoyda notes.
In her turn, Olha Shevchenko, Deputy Head of the State Production and Consumer Service, says that Ukrainian goods are really sought after on world markets – not only raw materials, but also finished products on store shelves. Focusing on logistics and standards, revisions of quotas, Great Britain is open to Ukraine, the Canadian market is actively interested in Ukrainian products, in particular, accreditation in the poultry industry is currently underway.
Ukraine also started negotiations with the United Arab Emirates (UAE) on the Comprehensive Economic Partnership (CEPA). The agreement can open the markets of Asia and the Middle East for Ukrainian products. It is planned to conclude it by the middle of next year.
“The Comprehensive Economic Partnership Agreement with Ukraine provides access to new markets in Asia, Africa and the Middle East for agricultural and industrial products from Ukraine,” said UAE Minister of State for Foreign Trade, Dr. Thani bin Ahmed Al Zeyoudi.
In her turn, the Minister of Economy of Ukraine Yulia Svyridenko said that this agreement will help our business communities to develop and use new opportunities.
“Ukraine is known for its role as a global guarantor of food security and a fast-growing IT center. So CEPA will make our economies complementary, and we look forward to working together to promote trade, the digital economy, as well as fostering our investment cooperation,” she said.
If this agreement is signed, Ukraine will become the first European country with which the UAE government will conclude a CEPA agreement.
The signing of this agreement is also important for Ukraine because since the beginning of Russia’s full-scale aggression against Ukraine, the UAE has tried to maintain neutrality, despite the pressure of Western countries on oil producers in the Persian Gulf with the aim of economically isolating Russia, which is a member of OPEC+.
At the same time, according to O. Shevchenko, the war imposes some restrictions on the opening of markets, because there are mechanisms where certain countries are ready to import products only after the arrival of inspectors and their inspection of enterprises – only then are certificates approved and agreements concluded. No country in the world came to Ukraine this year because of the war, but online inspections served as an alternative.
Compliance with high product quality standards helps Ukraine enter new markets.
“Although the world supports Ukraine, it’s not just about that, our manufacturers adhere to the standards of product safety and quality,” O. Shevchenko emphasizes.
Victoria Khadzhiradeva