Positive effect of the DCFTA on Ukraine’s exports to the EU
Ukraine and the EU concluded a deep and comprehensive free trade agreement (DCFTA) in 2014. In a recent comparative study, which also includes Georgia and Moldova, we look at the effect of the DCFTA on Ukrainian exports to the EU.
Between 2013 and 2018, exports to the EU increased by 20% in US dollar terms. During this period, prices for key Ukrainian export commodities declined heavily. In real terms, i.e. using constant prices of 2013, Ukrainian exports to the EU increased even more strongly – namely by 54%. As a result, the share of the EU among export destinations rose to 42% last year, up from 27% in 2013. All in all, we conclude that the DCFTA had a clearly positive effect on Ukrainian exports to the EU.
At the same time, we found out that the DCFTA had also a positive effect on the commodity composition of Ukraine’s exports. The concentration of exports declined by 21% from 2013 to 2018 and the share of processed goods increased from 32% to 41%. New products appear in the export basket, even though their value is with 2% of exports to the EU still low.
Thus, considering all indicators, we can safely conclude that the DCFTA had a clear positive effect on Ukraine’s goods exports to the EU. To us, this does not really come as a surprise, as we repeatedly highlighted in the past the transformative character of this agreement on Ukraine’s economy.
