Modernization of the Format of Ukraine’s Trade Integration With the EU in the Conditions of Implementation of the DCFTA

Abstract

Purpose: The purpose is to define the efficiency and priorities of modernization of Ukraine’s trade integration with the EU countries in the implementation of DCFTA and to attempt to assess the indirect effects of the free trade agreement between countries. Design/methodology/approach: To this end, a comparative analysis was carried out to assess the effectiveness of the Association Agreement and to identify the asymmetry of trade and economic integration between Ukraine and the EU. The correlation regression method was used to determine the dependence of Ukraine’s exports to the EU countries on GDP changes and to identify the integration impacts on economic growth. In turn, the extrapolation method was employed to calculate forecasts for the economic growth rate and GDP per capita. Findings: Determining the effectiveness and priorities of modernization of the trade integration format of Ukraine-EU in the implementation of the DCFTA, as well as evaluation of the intermediate results of the FTA between the countries. At present, it is necessary to modernize the format of Ukraine’s trade integration with the EU in the context of the implementation of the DCFTA. Three main vectors for updating the Agreement have been identified as priorities: deepening sectoral integration; increasing duty-free export to the EU market; eliminating non-tariff measures restricting trade with the EU along with signing a number of agreements for the above-mentioned purpose. Research limitations/implications: The results of the study will be useful to researchers of relevant issues, students, graduate students, doctoral students and teachers specializing in international relations and other academic disciplines, and the developed initiatives can be used by the government to form a new negotiating position on the Association Agreement between Ukraine and the EU. Originality/value: Forecasting and modeling the Ukraine-EU foreign trade turnover based on the use of the gravity model and correlation-regression analysis confirms that the introduction of the DCFTA in 2016–2017 allowed Ukraine to increase exports to the EU and modernization of the trade part of the agreement will positively affect the economic and social development of Ukraine. In this context, it is necessary to take into account the national interests and trade partners, in particular the possibility of Ukraine’s support for the EU initiative “European Green Deal” on the path to the formation of Europe as a carbon-neutral continent.

Economic Rationale for Manifestations of Asymmetry in the Global Trading System

“…In addition, the conducted study confirms that the active participation of the European Union in international trade is supported by its active participation in different RTAs. This idea is supported by Yatsenko et al [15], who emphasize that, for many countries, a free-trade agreement with the European Union becomes a driver for economic and social development.…”

“…As of 2020, generally, the availability of legislative acts in the electronic transactions sphere was 81%, 56% in protection of consumer rights, 66% in data confidentiality and 79% in cybersecurity. However, there are still countries (15), mostly in Africa, which lack any legal norms, while almost 20% of RTAs contain a chapter devoted to e-commerce.…”

“…In such a case, there is not only a deepening of existing asymmetries, but also the emergence of new ones in the global trading system [9][10][11][12][13]. Under the current circumstances, the decline in the effectiveness of the functioning of the World Trade Organization signalizes the need for an urgent response from all system participants to the challenges of the 21st century, with the aim of developing current rules for world trade, taking into account all possible scenarios of the development of the trading system [14][15][16][17].…”