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1. Association Agreement with Ukraine
Deep and Comprehensive Free Trade
Area
Antoine Schnegg

2. Goals
> Know the history, structure and effects of the DCFTA
214. April 2017

3. Ukraine as trade and investment partner of the EU
314. April 2017
> In 2014, Ukraine was EU’s 25th largest trading partner and 22nd largest
export market.
> The EU is Ukraine’s largest trading partner. In 2015, 33% of all Ukrainian
exported goods went to the EU. 40% of goods imported in Ukraine came from
the EU
> main exports from Ukraine to EU were ferrous metals, iron ore, electric
machinery and cereals.
> main imports in Ukraine from EU were machinery products, transport
equipment, chemicals, textiles and agricultural products.
> The largest investors in Ukraine are coming from EU countries (Cyprus and
the Netherlands)

4. History of the DCFTA
> The DCFTA’s negotiated by the EU allow Moldova, Georgia and Ukraine
preferential access to the EU common market.
> It was negotiated as an integral part of the Association agreement with Ukraine.
> While the agreements with Moldova and Georgia are fully in force since
summer 2016, the agreement with Ukraine is not ratified by all EU member
countries yet and only provisionally applied since 1st January 2016.
414. April 2017

5. Structure and content of the DCFTA
> The DCFTA is structured in 15 topical chapters
> Chapter 1: Market Access for Goods
> Overall, Ukraine and the EU will eliminate respectively 99.1% and 98.1%
of duties in trade value
> Chapter 2: Trade Remedies
> This chapter covers traditional trade defense instruments (anti-
dumping, anti-subsidy and global safeguard)
> Chapter 3: Technical barriers to trade
> This chapter covers traditional trade defence instruments (anti-
dumping, anti-subsidy and global safeguard)
514. April 2017

6. Structure and content of the DCFTA
> Chapter 4: Sanitary and phytosanitary measures (SPS)
> This chapter aims to facilitate trade in SPS related goods including
animals, animal products, plants and plant products, whilst safeguarding
the Parties' level of protection.
> Chapter 5: Customs and trade facilitation
> This chapter seeks to enhance co-operation in customs and customs-
related matters and to simplify customs requirements and formalities,
while at the same time preventing fraud.
> Chapter 6: Establishment, trade in services and electronic commerce
> This chapter aims at integrating Ukraine as much as possible into the EU
market. Unlike classical FTAs, it provides for both the freedom of
establishment in services and non-services sectors, subject to limited
reservations, and the expansion of the internal market for a set of key
services sectors.
614. April 2017

7. Structure and content of the DCFTA
> Chapter 7: Current payments and movement of capital
> Provisions on free movement of capital will include standard safeguards
with a possibility to apply measures to ensure the stability of the financial
system.
> Chapter 8: Public Procurement
> Ukraine will adopt current and future EU legislation on public
procurement, in order for both parties to participate to have access to
each other procurement market.
> Chapter 9: Intellectural property
> This chapter includes provisions on particular copyright, designs
(including unregistered ones), patents and geographical indications (GIs)
which complement and update the TRIPS Agreement
714. April 2017

8. Structure and content of the DCFTA
> Chapter 10: Competition
> the Parties prohibit and sanction certain practices and transactions which
could distort competition and trade.
> Chapter 11: Trade-related energy
> This chapter provides for rules on pricing of energy goods, on the
transport of energy goods, on the setting-up of independent regulators in
the energy sector and on non-discriminatory access for the exploration
and production of hydrocarbons.
> Chapter 12: Transparency
> Setting up a climate of dialogue when enacting new regulations and the
setting-up of contact points.
814. April 2017

9. Structure and content of the DCFTA
> Chapter 13: Trade and sustainable development
> Share commitment to the ILO core labor standards, to environmental
treaties, to refrain from lowering standards in these areas and to build-up
monitoring mechanisms.
> Chapter 14: Dispute Settlement
> The Dispute Settlement mechanism is based on the model of the WTO
Dispute Settlement Understanding, but with faster procedures.
> Chapter 15: Mediation
> A mediation mechanism allows Parties to tackle adverse effects on trade
in goods. The aim is not to review a measure's legality, but to find a quick
and effective solution to market access problems.
914. April 2017

10. Effect of the DCFTA
> In December 2016 a Working paper was published by the Vienna Institute for
International Economic Studies on the effect of the DCFTA:
> https://wiiw.ac.at/benefits-and-costs-of-dcfta-evaluation-of-the-impact-on-georgia-
> Results:
> “...the DCFTA will be rather costly, and social stress for the less
developed regions will be particularly arduous.”
> “Improved access to the large EU market along with institutional
improvements induced by the approximation to the EU acquis will bring
multiple economic benefits to the DCFTA countries, largely accruing in
the medium and long run, conditional on the successful implementation of
a wide range of reforms. ”
1014. April 2017

11. Thank you!
Antoine Schnegg