The effect of the Ukraine – EU Association Agreement on the consumer market

The article deals with the consequences for Ukraine's consumer market after the entry into force of the Association Agreement between Ukraine and the EU. The author analyzes the exports of domestic consumer goods in the EU during 2016-2017. Defined groups of consumer goods whose export to European countries has increased the most. During 2016-2017, out of 115 commodity groups, for 96 commodity groups, increased exports were registered, and in 19 commodity groups a decline took place. In 2017, a considerable number of commodity groups showed record volumes of exports to the EU in recent 10 years. Most of all, the Ukraine–EU Association Agreement promoted the entry to the European market for the exporters of such goods as: meat and edible byproducts of poultry; furniture; household appliances; sugar; canned tomatoes; margarine and similar food mixtures and dairy butter. A decline of export deliveries to the EU was registered for individual types of clothes and shoes produced under tolling contracts, as well as for individual argo-food items (such as fruit and vegetable juices, wines etc.). This reduction was related partly to the worsened market conditions for the above goods at the European market, and partly to the worsened conditions of their production in Ukraine. Despite the reduction of exports in individual clothes and shoe items, on the whole, exports of light industry produce to the EU increased during 2014-2017. While exports of fruit and vegetable juices in 2016-2017 just returned to their usual levels after the "conjuncture splash" of 2013-2015. Researches showed that, during 2016-2017, no substantial expansion of imports of consumer goods from the EU occurred in Ukraine. The only two exceptions are: 1) passenger cars, and 2) second hand clothes. In order to counteract the expansion of imported cars, it has been proposed to raise the import duty on this group of commodities in accordance with the Ukraine–EU Association Agreement. Implementation of EU directives regarding the taxation of alcoholic beverages and tobacco products has led to higher prices and volumes of "shadow" market for these goods. In this context, it has been justified to establish a minimum price for tobacco products.