DEEP AND COMPREHENSIVE FREE TRADE AREA IMPLEMENTATION IN CONDITION OF MACROECONOMIC FLUCTUATIONS IN UKRAINE

Oleksandr Kubatko; Tetyana Pimonenko

Oleksandr Kubatko Sumy State University
Tetyana Pimonenko Sumy State University

Keywords: agreement, export, free trade, import, integration, macroeconomic fluctuations

Abstract

The paper deals with the analysis of Deep and Comprehensive Free Trade Area (DCFTA) implementation by Ukraine. It was found that DCFTA implementation was not very progressive due to the military confrontation in the East of Ukraine and worsening macroeconomic situation. It is underlined that macroeconomic fluctuations in Ukraine during 2014-2015 in terms of real GDP decline, decrease in private consumption, increase of public debt, rise of consumer inflation, and devaluation of hryvnia exchange rate did not allow obtaining the significant benefits of DCFTA. Having lost industrial enterprises on Eastern part of Ukraine in 2014 the export to Russia and EU for many industrial items (like tanning or dyeing extracts, mineral fuels, mineral oils, oil seeds, and cereals to EU and mineral fuels, railway or tramway locomotives, nuclear reactors, boilers, machinery, electrical machinery and equipment, iron and steel to Russian) was decreased by 50%. Currently it is very difficult to predict consequences and results in future of DCFTA implementation in Ukraine. The experience of Visegrad Countries showed that without strong internal position the effective implementation of DCFTA will be impossible. It is underlined that high income Visegrad countries with a very high Human Development Index have developed the mechanisms of government-to-business cooperation during their EU accession process.

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