“THE EUROPEAN UNION IS OUR BIGGEST TRADING PARTNER”
The situation in the country has changed. Therefore, the formula “traditional goods — to the traditional markets” is no longer working, — the Trade Representative of Ukraine, Nataliya Mykolska
Nowadays, Ukraine needs to prove to the world that we are the state where reforms are taking place, business climate is improving, qualitative products are being produced and qualified services are being provided. And it is possible and necessary to work with Ukrainian companies for many tomorrows. This is one of the main tasks of the Trade Representative of Ukraine — the Deputy Minister of Economic Development and Trade, Nataliya Mykolska. Ms. Mykolska told “Fashion of Diplomacy” how our trade had changed and how to popularize the Ukrainian.
In one interview, you said you applied for this post in order to change the image of Ukraine in the international arena. What has been managed?
— A lot and not much has been managed. Ukrainian exports are growing this year. And this is one of the drivers of the economy and the achievement of our business.
For the first time in 26 years of independence, we have developed, presented and even now, before the approval, we are implementing the Export Strategy of Ukraine and the relevant action plan – a guideline for the government and business for the next five years.
And of course, the entry into force of the Free Trade Agreement with Canada as of August 1, 2017. It opened the Canadian market for 98% of Ukrainian goods. By doing so, it has created new opportunities for business and investment attraction.
Another important achievement — on October 1, 2017, the additional trade preferences of the EU for Ukraine came into force. This is one more opportunity for Ukrainian exporters beyond the free trade zone with the EU. Also, we are completing the procedure for joining the Regional Convention on pan-Euro-Mediterranean preferential rules of origin.
Our work with Ukrainian business, including business in the regions, is something I am proud of. After all, not the government does export, but business.
How are Ukraine and the Ukrainians perceived in the world now?
— We represent Ukraine at all international events and meetings as a state with business that is a reliable trading partner. We are talking about high-qualitative, unique and innovative products and services of our enterprises.
We often face the problem of Russian propaganda. It is aimed at forming a negative perception of Ukraine, Ukrainian goods and services. That is why, among our tasks is to convey to the world that Ukraine is a state where reforms are taking place, business climate is improving, qualitative products are being produced and qualified services are being provided; that Ukrainian companies can and should be worked with for many tomorrows. We are also telling the world the stories of success of the Ukrainian business.
For almost two years, the Deep and Comprehensive Free Trade Agreement between Ukraine and the European Union has been in force. What achievements have we got during this time?
— Exports to the EU are constantly growing — and this is a tendency. More and more goods with added value are appearing. The share of goods remaining on the EU market is growing. Many said that the export of dairy products is unnecessary to anyone. As of today, 18 Ukrainian companies already have the right to supply their products to Europe. Moreover, the volumes of “dairy products” are increasing. The significant growth in the export of butter was a pleasant surprise. Today, we are the second country supplying this product to the EU market after New Zealand. A similar breakthrough was made by Ukrainian ice cream — by 344 times or by 327.5 thousand USD for the first quarter of 2017.
What other Ukrainian products are in demand in the EU?
— The European Union is our biggest trading partner. During eight months of 2017, an export to the EU was $ 11 billion and it increased by $ 2.4 billion in comparison with the same period last year. The largest increase was in the supply of ores and iron concentrates, corn, ferroalloy, sunflower oil, isolated wires. We are also entering TOP-10 largest agricultural producers in the EU.
How easy is it to our producers to get on the European market?
— Exit to any external market is a long game. You invest in marketing, promotion in order to conquer a particular consumer. This game is quite predictable, as opposed to what we had on the market of the Russian Federation.
The Export Promotion Office was created in order to help Ukrainian exporters to enter foreign markets. One of the tasks of which is to promote Ukrainian goods and services abroad and assist in establishing cooperation and partnership between Ukrainian and foreign business. The office provides assistance in seven directions: information and analytics; export consulting; educational platform; business opportunities; international public procurement; B2G platform; SheExports platform.
Using opportunities to enter new markets is not easy. A company cannot just want to start exporting its products. It must meet certain requirements and it must undergo certification. This is a difficult and painful process, but at the same time, it is the opportunity to move to a new, higher level of competition. Many entrepreneurs use the transition to European quality standards to enter other markets where they are recognized — for example, Chinese ones.
How are our sales offices working or at which stage of creation are they in the world?
— Today, the Ministry of Economic Development together with the Ministry of Foreign Affairs is working on the implementation of a pilot project to enhance the representation of Ukraine’s economic interests abroad. The beginning of this pilot project is scheduled for 2018.
Our representatives will work as part of the foreign diplomatic institutions of Ukraine and will be subordinate to the Ministry of Economic Development. The list of the countries, which have the greatest prospects for the development of Ukrainian exports, has been defined by the export strategy of Ukraine. These are the socalled markets “in focus” — 20 prospective markets, plus 28 EU countries, are selected. Therefore, the first “pilots” will be among the markets “in focus”.
The Free Trade Agreement with Canada entered into force. Is it easier to our manufacturers to enter their market?
— This is the second free trade regime (after the EU), which has come into force since the Revolution of Dignity. However, the case with Canada is somewhat special. After all, thanks to the active lobbying of the influential Ukrainian community, we have received more preferences and better conditions. This is very important because the Canadian market is large and there is a possibility of diversifi cation for Ukrainian companies.
The Agreement provided a “green light” for cooperation between Ukrainian and Canadian companies in the IT, high-tech, engineering and aerospace and machine-building sectors within participation in global value added chains. Prospective sectors, the growth of which we expect, include Ukrainian food products, processing equipment and spare parts for it. The third successful sector is furniture and everything related to woodworking. Also, we include Ukrainian light industry and fashion to promising sectors. Some Ukrainian designers have already succeeded in the Canadian market by opening their boutiques there. Another sector, where we see our prospects for cooperation, is aircraft building.
Canadian imports to Ukraine are also growing. We are interested in this. Canada supplies goods and services to Ukraine that we do not manufacture on our own and would import from the other countries. Therefore, we are interested in the Ukrainian market having as many qualitative goods from Canada as possible, given they create competition for European imports, thus hindering the growth of prices.
There are negotiations on a free trade zone with Israel. What stage are they at?
— On September 28, during the seventh round of negotiations in Tel Aviv, we headed into the homestretch in the negotiations on the conclusion of the Free Trade Agreement. Israel is a market “in focus” according to the Export Strategy of Ukraine. The Agreement will provide new opportunities for Ukrainian exporters. That is why we are aiming at providing the duty-free access for goods that comprise the export potential for Ukraine and will enjoy competitive advantages on the Israeli market. In particular, in view of Ukraine’s accession to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin, the member of which the State of Israel is, Ukrainian products will become part of global value added chains.
How has the Export Strategy of Ukraine changed over the year?
— The situation in the country has changed, so the formula “traditional goods — to the traditional markets” is no longer working. The Ukrainian exports were greatly influenced by the trade aggression of Russia — artificial restrictions for Ukrainian manufacturers were created, transit along the territory of Russia, through which 90% of exports to Kazakhstan and Kyrgyzstan took place, was prohibited.
Export Strategy is not a static project. It evolves and responds to changes and challenges in international trade. The document will allow business to become more sustainable and use this guideline to form export policy.
Now, an important task is to make export promotion a permanent, coherent and integrated policy. If we want the Export Strategy to work for us, we should first work for it. The state and business should build a system of export support jointly. Because it forms, 50% of the country’s GDP and affects economic growth directly.
Why is it beneficial for the European and world investors invest in Ukraine?
— It is beneficial for investors to invest in export oriented sectors in Ukraine. These are the food industry, information and communication technologies, machine building, light industry and others.
I can explain on the example of the “triangle” of Ukraine — Canada — the EU free trade. These free trade agreements open the way to the production of goods and services on the territory of Ukraine, the supply of them back both to Canada and to the territory of the EU. Ukraine is a production hub for Canadian companies in the European continent. However, Ukraine is viewed as a hub not only by North American and European investors, but also by Asian and Middle Eastern ones.
You are actively promoting Ukrainian designers. Why is this important?
— The more Ukrainian things and accessories each of our government officials, parliamentarians, and diplomats will have — the better. We need to show by personal example — the Ukrainian is qualitative, comfortable and stylish. Since the appointment, I have been buying clothes, footwear and accessories only from our manufacturers.