Results of the creation of free trade zones with leading economies of the world, Stepan Kubiv

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First Vice-Prime Minister of Ukraine, Minister of economic development and trade of Ukraine Stepan Kubiv talks to the FD correspondents about the details of the development of the national economy, about the results of the establishment of free trade zones (FTZ) with the leading economies of the world and about the consequences of his visit to India.

How would you assess the establishing of the FTZ (free trade zone) with the most powerful global economies? As we know, the Government defined this process as one of its priorities…

– With Canada, such an agreement has already been concluded. Canada applies a global system of tariff quotas for all countries. Thanks to the free trade agreement, Ukrainian agricultural products within the quota limits will receive better access (at zero duty) than other countries that do not have preferences (at zero duty) immediately after the agreement enters into the force. In addition, according to the analysis conducted by the WTO, the volume of global quotas for individual products (dry wheat, wheat, barley, beef and veal, ice cream, margarine, dry oil) has not been fully exhausted. Therefore, Ukrainian manufacturers can use the opportunities provided by this agreement.

Negotiations for the conclusion of a free trade agreement with Israel are defined by the Government Action Program for 2016. At the moment, we have discussed and worked out the main provisions, in fact, the draft agreement, the negotiators have considered the mutual possibilities of liberalizing trade of agricultural and industrial goods. We have the report on the outcome of the talks in which we have recorded key agreements between Ukraine and Israel. The immediate task is to consult with businesses community and the associations to outline clearly their interest and areas of cooperation.

How could you comment our trade relations with the key partner – with the EU?

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– As an economist and mathematician I will answer in the language of numbers. Almost 30 thousand certificates EUR.1 (certificates for registration of export of goods from Ukraine according to the EU standards – FD.) have already been issued. 86 enterprises have the status of authorized exporter that enables them to export to the EU without the need for a certificate. Ukrainian manufacturers have been using the preferences in the framework of trade between Ukraine and the EU and the exports continue beyond the tariff quotas. 9 tariff quotas have been completely used for the agricultural products; the quota for poultry meat has been completed traditionally, the tariff quota for butter and milk paste is used by 46%, for dry milk – by 30%. In general, it should be noted that exports to the EU have already increased by 7%, especially food products (by 68%).

“INDIA HAS BEEN DEMONSTRATING IMPRESSIVE ECONOMIC ACHIEVEMENTS, AND THEREFORE IT IS AN EXTREMELY PROMISING PARTNER FOR OUR COOPERATION.”

What, in your opinion, can be defined as the undisputed victories of the actual Ukrainian government?

– The first victory is about infrastructure and road construction. Thanks to the decentralization decision, the local budgets were able to be engaged in the construction of quality highways. Visiting the regions, I became convinced: local authorities are well aware of the tremendous influence of high-quality roads on local development and attraction of investors in all sectors. So, we have been actively working in this direction too. Secondly, I support the Ukrainian industry. We simply have to restore the industrial greatness of Ukraine, which is still renowned for its aviation industry, heavy car manufacturing and infrastructure, and most importantly – for its specialists in the field of innovation and high technologies that are capable of implementing the most complicated engineering solutions, including projects for the digital economy.

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Are you satisfied with the results of your visit to India? After all, for many years the Ukrainian-Indian cooperation was frozen…

– India now has impressive economic achievements, and therefore becomes an extremely promising partner for our cooperation. This country is the first in the world in terms of GDP growth, which in the near future may exceed $ 3 billion. That means that India will have more opportunities for foreign investment. Therefore, we have offered colleagues from Delhi some joint projects in the spheres of energy, infrastructure, and regional construction. In addition to the investments partnership, India is attracting the scale of its consumer market that may soon become the largest in the world. The Indian market will require a large number of goods and services in various areas: I mean not only food and beverages, but also industrial products, machines, machinery, equipment for industry and transport, and much more. This opportunity should be used with mutual benefit for our countries. I note that India loves our agricultural products, most of all – the oil. We will continue to increase the supply and expand the range of Ukrainian products. Despite the short deadlines, the Foreign Ministry has prepared a very good program of visit. It has turned out to be rich and balanced; it is a great success of the Embassy of Ukraine in India. During my visit to India, I was honoured on behalf of the President of Ukraine, Petro Poroshenko, to renew the invitation for the President of India to visit Ukraine this year. In the Ministry of Economic Development, we must prepare the effective meeting of the Ukrainian-Indian intergovernmental commission, as I have mentioned before.

How would you assess the actual state of the Ukrainian economy? When will the desirable breakthrough make our economy truly innovative?

– The lack of a strategy and distinct priorities for the development of innovation has destroyed the Ukrainian system of scientific research, focused on further implementation in production and industry. We have developed a series of systemic solutions, but we need Parliament’s support. First of all, it is necessary to give the Ministry of Economic Development the authority to build up the innovation policy for the real sector of the economy as well as to make changes in the law on innovation activity.

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It is necessary to streamline rather complicated legislative regulation of innovations for a business-oriented policy to support the demand for innovation of large and small business, startups, and to form a single vision for the formation and implementation of state policy in the field of innovation activity in Ukraine.

Which global markets are the most promising ones for Ukraine?

– It is necessary to expand the networks of the marketing on the regular basis and gradually in all directions. We are currently active in the markets of the Middle East, Africa, Latin America and some countries in the Asia-Pacific region. They are the most promising for the sale of Ukrainian products in the agroindustrial complex, mechanical engineering and metallurgy. At its meeting on August 8, the government approved a document that would allow Ukraine to join the Regional Convention on pan-Euro-Mediterranean preferential rules of origin. This in the long run will open for Ukraine more favourable conditions for the export of goods and increase the presence of Ukrainian products in the markets of the EU member states, the EFTA, Montenegro, Serbia, Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, Turkey, Faroe Islands, Albania, Macedonia and Moldova.

Moreover, according to the results of the visit to Indonesia as part of a delegation headed by President Poroshenko, we also agreed to initiate bilateral consultations with the Indonesian side on trade and economic cooperation.