The EU and Ukraine signed a landmark Association Agreement (AA) on June 27, 2014 that includes the establishment of a Deep and Comprehensive Free Trade Area (DCFTA). General provisions and parts of the political and cooperation chapters of the AA have applied provisionally since November 2014, with the trade related aspects entering into force on 1st January 2016.
The trade provisions of the EU-Ukraine Association Agreement constitute a milestone in the partners’ bilateral relationship and offer new economic benefits to both sides. “The entry into force of this trade area on 1 January 2016 creates unique opportunities for Ukraine to stabilize, diversify, and develop its economy to the benefit of all its citizens,” said Cecilia Malmström, EU Trade Commissioner. “Assistance from the EU will be made available to help Ukrainian SMEs [small and medium-sized enterprises] seize new opportunities, to grow, and thereby create jobs. EU businesses will benefit as well by gaining improved access to a market of 45 million people,” she said.
DCFTAs go well beyond reducing tariffs, which are already relatively low, and address regulatory issues and the opening of markets for services, investment, and public procurement. Thanks to the EU-Ukraine DCFTA, Ukrainian businesses can count on stable and predictable preferential access to the world’s largest market of more than half a billion consumers. EU businesses will benefit from easier access to the Ukrainian market and be able to build new relationships with Ukrainian partners. Independent studies estimate that the implementation of the AA/DCFTA could benefit Ukraine by an additional 6 percent of GDP over the medium-term.