Ukraine

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0:05 AM Sunday, November 18, 2018
Trade
Diverted from Russia, Ukraine Exports Enter New Markets
Ukraine exports up 21 percent around the world; Surprise resurgence of trade with Russia
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

KYIV – Protesters were manning tents down the block from the Cabinet of Ministers, but on the third floor Natalia Mykolska’s mind was traveling around the world, focusing on Ukraine’s exports to India, Turkey, Israel, the EU, and Russia

As Ukraine’s Trade Representativ, Mykolska has the job of reorienting Ukraine’s trade after Russia turned on its ‘sister republic’ in 2014.

Progress is being made – West, East, South and even North. Through August, Ukraine’s exports are up 21 percent, to $27.5 billion.

Russia Rebound

Ukraine’s trade with Russia unexpectedly rose 29 percent through August, year over year, State Statistics Service of Ukraine reports. Russia is Ukraine’s largest single nation trading partner, accounting now for about 10 percent of trade.

“It is not growth – it is some renewal of the situation we had before,” Mykolska, an international trade lawyer, said, choosing her words carefully. “Russia has not relaxed its trade regime. There are still bans, protective tariffs, phytosanitary measures.”

Ukraine Looks West

For modern Ukraine, the EU is now the main stage. In the first half of this year, Ukraine’s trade with the EU rose to 40 percent of Ukraine’s total trade.

While many Ukrainians grouse that the EU is protectionist in agriculture, Ukraine now is the largest supplier of wheat, corn, barley and oats to the EU. Over the last year, 18 Ukrainian milk producers have won access to the EU dairy market. Ukraine now is the second largest supplier of butter to the EU, after New Zealand, the historically dominant supplier.

Unexpected Ukrainian products – electric heaters, train parts, furniture, yachts and leather hats – are doing well this year in Europe. The number of Ukrainian companies exporting to the EU is climbing fast.

Power triangle: Nataliya Mykolska speaks last month at the Kharkiv International Economic Forum, flanked by Boris Lozhkin (left), the Kharkiv-born Secretary of the National Investment Council, and Oleksandr Yaroslavsky (right) the Kharkiv industrialist. (UNIAN/Andrii Marienko)

Turkey Talks Back on Track

Looking South, the visit here by Turkish President Recep Tayyip Erdoğan on Oct. 9 gave a high level green light to trade negotiators to expand free trade talks to cover all economic sectors. With this logjam broken, bilateral free trade talks resume here Wednesday.

“After a pause, a high level political decision was made that the agreement will cover all sectors, including food and industrial products,” Mykolska said.

Turkey has several advantages for Ukraine. It is already the third largest importer of Ukrainian goods. Due to its open economy and young population, it is rated as one of 15 countries worldwide where imports will grow the most in the 2020s. In the last six months, almost 90 new Ukrainian products entered Turkey.

Turkey, partly by location, partly by vocation, is a nation with historic trading routes south.

“Turkey could be Ukraine’s gateway to third markets -- to the Persian Gulf, to Middle East, to Africa,” she said: “We have a direct borderline through the Black Sea, with no aggressive neighbor between us to stop our trade.”

With Turkish investment flowing out of the country, Ukraine hope to attract greater flows. During the first half of this year, only $20 million in new Turkish investment was recorded in Ukraine.

Promotion boosts trade: Canadian Forces street hockey team prepares to play last June on Kyiv's Kreschatyk (UNIAN/Inna Sokolovska)

Israel FTA Close

Further south, Mykolska was in Israel last month, negotiating a bilateral free trade agreement.

“We are very close to completing the negotiations with Israel – we agreed on a number of very important issues,” she said. Reflecting the comfort level between the two teams, she said the next rounds of talks will be conducted by video conferencing.

One concrete impact of a free trade pact would likely be the start of a direct shipping line between Odesa and Haifa. While much of Ukraine’s trade with Israel is in IT and tourism, a shipping line would promote Ukraine’s food exports to Israel.

Canada’s example shows that free trade agreements work best if they are accompanied by forums and workshops to publicize trade opportunities, Mykolska said. Due to extensive promotion, Ukrainian exports to Canada rose 75 percent during the first half of this year – before the trade pact officially went into effect on Aug. 1.

A fair of Indian goods in Zaporizhia (UNIAN/Aleksandr Prilepa)

Big India Awaits

Mykolska, who led a trade mission to India last month, sees big opportunities in a country expected to have more people than China by 2022.

“There is a huge potential for cooperation – shipbuilding, agriculture, creative services,” she said, adding that the trade mission to India prompted “about six follow ups.”

“India is renewing its shipping fleets, they want boats, spare parts and service,” she said of a country with a 7,500 km coastline.

On one level, Ukrainians can benefit from India’s familiarity with Soviet-era technology, due to the Soviet-Indian Cold War alliance. For example, the Indian Air Force flies 100 Antonov An-32 turboprop military transport planes.

With incomes rising, India’s 1.3 billion people are eating more and their diets are changing. Today, India is the top buyer of sunflower cooking oil from Ukraine, which, in turn, is the world’s largest producer of ‘sunoil.’

“The Indians look for quality, they look at the legacy,” Mykolska said. “They travel a lot and they like it when people come to them.”

Since becoming Trade Representative, in April 2015, Mykolska has spent 200 days on the road, visiting 26 nations to promote exports from Ukraine.


For comments and story ideas, please contact UBJ Editor in Chief at laurenson.jack@theubj.com

Slider photo: Nataliya Mykolska, Ukraine's Trade Representative, talks earlier this month at the Kyiv International Economic Forum (UBJ Editor)

Posted Oct. 23, 2017

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