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Harmonisation of the systems of technical regulation as a condition of increase in turnover between EU and Ukraine

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  • Lir V., Bykonia O.

Abstract

The Association Agreement between Ukraine and the EU provides for the introduction of a deep and comprehensive free trade area (FTA). In this situation, Ukrainian producers are facing two problems: the first one is how to avoid losing the already achieved positions on the domestic market due to possible importation of cheaper and high-quality European substitutes; and the second one is searching for a niche to export, to EU countries, not only raw materials but also of finished industrial products. In any case, a necessary condition for the competitiveness of Ukrainian producers is upgrading their production to meet European standards of quality and safety. The article deals with the problems of reform and harmonization of technical regulation of Ukraine and the EU, whose solution is a prerequisite for increasing and improving the structure of trade turnover between Ukraine and the EU. The authors present a comparative analysis of Ukraine's position in the global dimension distribution of non-tariff barriers to trade and the competitiveness of the economies of the world. According to the "Global Competitiveness Report" in terms of "Prevalence of trade barriers", reflecting the extent to which non-tariff barriers (technical requirements and standards) limit the ability of imported goods to compete in the domestic market, Ukraine occupies 118th place. Many occasional (ad hoc) notifications on technical regulation indicates the active development of the sphere of trade both in Ukraine and in the whole world. The authors provide an analysis of the structure and dynamics of foreign trade between Ukraine and the EU. It is established that, as of today, a largely raw-material pattern of Ukrainian exports to the EU has been formed, whereas Ukraine's imports from EU are dominated by finished and high-tech products. This is despite the fact that Ukraine, on the majority of commodity groups, has its own industrial capacities, though of lower quality and safety standards of finished product. It is proved that the presence of technical barriers to trade between Ukraine and the EU is a major obstacle to the improvement and expansion of mutual trade structures. The authors define the most significant technical barriers and problems of adaptation of domestic producers to changes in the mode of foreign trade. In the opinion Ukrainian exporters, the most significant barriers to trade are related to the procedures to ensure product quality at all stages of production beginning from design. The issue of testing and certification is in the second place by importance. The third and fourth issues are related to product safety. Thus, the main condition for the expansion of trade between Ukraine and the EU following the introduction of the FTA is elimination of technical barriers to trade. It is proved that, in the future, provided that Ukrainian legislation is approximated to the EU's, and the standards and quality infrastructure are properly harmonized, the scope of the Agreement on Conformity Assessment and Acceptance of Industrial Products can be extended to industrial sectors capable to produce competitive products for final use. The authors define domestic industries, which are prospective as to increasing exports to the EU and products that require urgent harmonization of the national legislation with the European one (in accordance with the above mentioned terms of transitional period). It is established that, together with the significant progress on the harmonization of technical regulation of Ukraine, primarily due to financial and technical assistance of the EU, there are problems and risks of a slowdown in achieving the target parameters of the system of technical regulation and certain inconsistencies between the set priorities and the new terms of trade with the EU which in turn can lead to increased asymmetric effects. The authors make conclusions and set out proposals to solve the above mentioned problems of harmonization of technical regulation between Ukraine and the EU.

Suggested Citation

  • Lir V., Bykonia O., 2015. "Harmonisation of the systems of technical regulation as a condition of increase in turnover between EU and Ukraine," Economy and Forecasting, Valeriy Heyets, issue 3, pages 71-88.
  • Handle: RePEc:eip:journl:y:2015:i:3:p:71-88
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    File URL: http://eip.org.ua/docs/EP_15_3_71_uk.pdf
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    1. Malgorzata Jakubiak & Maryla Maliszewska & Irina Orlova & Magdalena Rokicka & Vitaly Vavryschuk, 2006. "Non-tariff barriers in Ukrainian export to the EU," CASE Network Reports 0068, CASE-Center for Social and Economic Research.
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