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The Free Trade Agreement between the EU and Ukraine: Conceptual Background, Economic Context and Potential Impact


  • Marek Dabrowski
  • Svitlana Taran


The idea of a Deep and Comprehensive Free Trade Agreement goes beyond the traditional concept of trade liberalization and, apart from the elimination of tariffs in trade of goods, it also includes the reduction/ removal of non-tariff barriers, the liberalization of the investment regime, the liberalization of trade in services, and the far-reaching harmonization/ mutual recognition of various trade and investment-related regulations and institutions. The economic literature, CGE modeling exercises and the practical experience of “deep” trade integration suggest a substantial potential for the future EU-Ukraine DCFTA in promoting trade and investments, creating additional welfare and employment, regulatory and institutional harmonization with EU’s acquis, and modernizing Ukraine’s economy. While beneficial for both sides, the potential gains (but also potential adjustment costs) are greater for Ukraine as it is the smaller partner with higher initial trade barriers. However, the DCFTA does not include an automatic guarantee of success. Very much depends on the political will and administrative capacity to implement all of its provisions in a timely and accurate manner. This is a serious challenge for Ukraine, which has a mixed record in reforming its economy and state and which is still struggling to fulfill all of its commitments undertaken during the WTO accession process.

Suggested Citation

  • Marek Dabrowski & Svitlana Taran, 2012. "The Free Trade Agreement between the EU and Ukraine: Conceptual Background, Economic Context and Potential Impact," CASE Network Studies and Analyses 437, CASE-Center for Social and Economic Research.
  • Handle: RePEc:sec:cnstan:0437

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    References listed on IDEAS

    1. Anders Aslund, 2009. "How Ukraine Became a Market Economy and Democracy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4273.
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    Cited by:

    1. Anders Aslund, 2013. "Ukraine's Choice: European Association Agreement or Eurasian Union?," Policy Briefs PB13-22, Peterson Institute for International Economics.
    2. repec:bla:jcmkts:v:55:y:2017:i:1:p:121-136 is not listed on IDEAS
    3. Lalita A. Manrai & Ajay K. Manrai & Dana-Nicoleta Lascu & David Dickerson, 2015. "Retail Developments in Poland, Kazakhstan, and Ukraine: A Comparative Analysis," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 14(1), pages 63-77, June.
    4. Peter Havlik, 2014. "Vilnius Eastern Partnership Summit: Milestone In Eu-Russia Relations – Not Just For Ukraine," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 21-51, March.

    More about this item


    Trade; Investment; Deep and comprehensive free trade agreement; European Union; Ukraine; Business climate;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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