EU trade and Ukraine

Chapter 5: DCFTA IMPLEMENTATION IN UKRAINE

5.2. Economic relations with Russia and CIS.


After starting the EU integration process, beginning of political and military conflict between Ukraine and Russia provoke the huge range of issues and challenges for Ukrainian economy. For overcoming these issues and problems Ukraine should change and reorient policy and prioritise of cooperation. In addition, Ukraine should try to safe own balance among all spheres in the world. In 2018 (19 of May), Ukrainian Government decided to get out from the Commonwealth of Independent States. 

According to the information at Wikipedia (Union State,2018) the Commonwealth of Independent States (CIS) also sometimes called the Russian Commonwealth in order to distinguish it from the Commonwealth of Nations, is a regional intergovernmental organisation of 10 post-Soviet republics in Eurasia formed following the dissolution of the Soviet Union. 

Table 1 Structures of CIS on 2018

Country

Agreement/Protocol ratified

Charter ratified

Notes

Azerbaijan

24 September 1993

24 September 1993

 

Belarus

10 December 1991

18 January 1994

Founding state

Kazakhstan

23 December 1991

20 April 1994

Founding state

Kyrgyzstan

6 March 1992

12 April 1994

Founding state

Armenia

18 February 1992

16 March 1994

Founding state

Moldova

8 April 1994

15 April 1994

 

Russia

12 December 1991

20 July 1993

Founding state

Tajikistan

26 June 1993

4 August 1993

 

Uzbekistan

4 January 1992

9 February 1994

Founding state

Union State, 2018

 

The CIS encourages cooperation over economic, political and military aspects and has certain powers possessing coordinating in trade, finance, law making and security. It has also promoted cooperation on cross-border crime prevention.

The CIS has its origins in the Soviet Union (USSR), which was established by the 1922 Treaty and Declaration of the Creation of the USSR by the Russian SFSR, Byelorussian SSR and Ukrainian SSR. When the USSR began to fall in 1991, the founding republics signed the Belavezha Accords on 8 December 1991, declaring the Soviet Union would cease to exist and proclaimed the CIS in its place. A few days later the Alma-Ata Protocol was signed, which declared that Soviet Union was dissolved and that the Russian Federation was to be its successor state. The Baltic states (Estonia, Latvia and Lithuania), which regard their membership in the Soviet Union as an illegal occupation, chose not to participate. Georgia withdrew its membership in 2008. Ukraine, which participated without being a member, ended its participation in CIS statutory bodies on 19 May 2018. 

Eight of the nine CIS member states participate in the CIS Free Trade Area. Three organizations are under the overview of the CIS, namely the Collective Security Treaty Organization, the Eurasian Economic Union (alongside subdivisions, the Eurasian Customs Union and the Eurasian Economic Space, which comprises territory inhabited by over 180 million people); and the Union State. While the first and the second are military and economic alliances, the third aims to reach a supranational union of Russia and Belarus with a common government, flag, currency and so on (Union State, 2018). 

Unfortunately, the political and military instability influence on Ukrainian trade indicators. Thus, figure 6 presented the dynamic of trade between Ukraine and Russia. 

 

Figure 6 Dynamic of trade between Ukraine and Russia (State, 2018)

 

The findings showed that after 2014 the volume of trade has the decreasing trend (figure 7). 

 

Figure 7 Export-Import Ukraine 2010-2011 

Sources: State, 2018

 

In addition, among other partner of CIS the trade-relations with Russia had more than 70% in the total volume of trade with CIS countries (table 2). In table 2 the dataset of trade with CIS countries was presented. 

 

Table 2 The dynamic of trade between Ukraine and CIS countries

Year

2010

2011

2012

2013

Countries

Export

Import

Export

Import

Export

Import

Export

Import

TOTAL

50744291,2

60351954,4

67594103

81040530,9

67779842,2

83135362

62305927,3

75834614,1

CIS

18482943,2

26607200,1

25835779

37080132,3

24911253,3

34317904,3

21672111,1

27741527,4

Azerbaijan

606510,9

948581

698285,7

641810,3

757260,5

76222,4

858863,1

74860,6

Belorussia

1868232,8

2563652,2

1877090

4204461,8

2227506,7

5055456,7

1940239,1

3586639,4

Armenia

199609,1

17093,9

224541,6

17499,2

176709,7

22601,4

178393,9

19409,3

Kazakhstan 

1283862,5

753380

1828329

1651380,8

2432711,1

1463582,3

2084101,5

663798

 Kyrgyzstan

74241

6171,4

110679,7

7493,3

126362,8

6509,7

132556,9

11779,1

Moldova

706011,1

70257,1

864651,8

125932,4

812385,6

114723,6

895713,5

92398,6

Russia

13241990,6

22133252,7

19588508

29045674,6

17326621,8

27340493,8

14786701

23097569,5

Tajikistan

74189,5

3491,1

59032,8

13025,4

99936,4

7199,9

60152

5045,9

Turkmenistan

207172,1

29591,1

240662,3

729523,9

527086,9

123018,1

393394,3

99397,6

Uzbekistan

221123,5

81729,7

343997,5

643330,4

424671,9

108096,4

341995,7

90629,4

Other countries

32261348

33744754,3

41758324

43960398,6

42868588,9

48817457,7

40633816,2

48093086,7

 

2014

2015

2016

2017

TOTAL

53901689,1

54428716,9

38127149,7

37516443

36361711,2

39249797,2

43264736,0

49607173,9

CIS

14882294

12976129,4

7806147,2

10485576,9

6031505,8

8565389,1

6916460,3

11477924,8

Azerbaijan

591532,8

45308,1

318824,8

30288,1

247979,6

39736,9

354657,8

417316,1

Belorussia

1617084

1329,2

870696,4

2449145,5

903197,5

2777793,6

1142896,9

3205313,2

Armenia

173359,3

19288,4

101561,9

7376,7

88924,5

8216,1

105109,7

10865,0

Kazakhstan 

1069434,3

11,1

712744,5

377578,4

400107,6

434290,0

372085,3

317953,7

 Kyrgyzstan

102545,8

72085,1

75501,8

5801,7

40430,8

1773,6

34315,4

3001,1

Moldova

743630,1

61859,5

524294

41242,4

481145,4

47623,2

707583,5

106719,5

Russia

9798226,2

12699989,1

4827717,9

7492724,5

3592917,9

5149313,5

3936464,3

7204013,0

Tajikistan

46685,2

3233,2

29982,9

2771,7

25427,9

1245,9

34091,8

676,3

Turkmenistan

431232,6

109,6

170325,7

16318,4

108981,9

34336,1

62142,3

89345,8

Uzbekistan

308563,7

72916,1

174497,3

62329,5

142392,7

71060,2

167113,3

122721,1

Other countries

39019395,1

41452587,5

30321002,5

27030866,1

30330205,4

30684408,1

36348275,7

38129249,1

Sources: State, 2018

 

The dataset in figure 7 showed that after Russia, Belorussia and Kazakhstan were the largest partners among CIS countries. But as with Russia, the dynamic of trade has the negative tendency. 

Figure 8 Export between Ukraine and CIS countries (excluding Russia)

Sources: State, 2018

 

Also, should underlined, that as export as import started to decrease after 2014 (figure 8 and 9). But in 2014 the trade relations started to close with Belorussia. Thus, in 2014 import to Belorussia from Ukraine had the lowest level – 1,32 bln USD. So, after 2015, the situation with Belorussia has started to recover. 

 

Figure 9 Import between Ukraine and CIS countries (excluding Russia)

Sources: State, 2018

 

From the other side, as indicated in the previous chapter Ukraine the positive dynamic on trade relation with EU countries. 


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