Yanukovych signs law on ratification of free trade agreement with CIS

Ukrainian President Viktor Yanukovych has signed law No. 5193-VI on the ratification of the free trade area agreement with the CIS.

The president signed the document on Aug. 9, 2012, according to his press service.

As reported, on Oct. 18, 2011 in St. Petersburg, the prime ministers of the CIS member states, including Ukrainian Prime Minister Mykola Azarov, signed an agreement setting up a free trade area with CIS member states.

The Verkhovna Rada, Ukraine's parliament, ratified the agreement on July 30.

The implementation of the agreement is expected to facilitate GDP growth by 2.5%, reads the document.

"Thus... the increase in one integral indicator alone – gross domestic product - will be about Hr 37.5 billion. The additional increase in receipts to the national budget could amount to around Hr 9.4 billion per year," reads the report.

In particular, the report states that the additional growth in agriculture could be 3.86%; in the food industry 3.36% (due to the high level of cooperation and removal of sanitary and phytosanitary barriers and the abolition of antidumping measures in mutual trade); in the light industry by 3.11% (by clearing access of Ukrainian commodities to the CIS markets); steel making and production of ready-made metalware by 4.2% (due to the elimination of export duties, including those on fuel and better access of goods to the CIS markets); in the chemical and petrochemical industry by 4.75% (by increasing productivity in Ukraine and an increase in demand for petrochemical products, including tires and plastics); the engineering industry by 7.19% (due to the fact that Russia and other CIS states are key markets for Ukrainian goods).

"The increase in production in all of the key economic activities when the free trade area is set up will also have an impact on the service sector: trade will get an additional 3.01% of the sector's output, and transport 2.87%," reads the document.

Among the main advantages of the signing of the agreement on a free trade zone are setting obligations on the non-increase of duties on goods excluded from the free trade regime, stipulating the international state agreement on obligations not to use new restrictions in mutual trade, establishing deadlines for the abolition of import exemptions, setting out cuts in export duties, reducing the number of agreements on trade and economic relations with the CIS countries, and solving trade disputes within the mechanisms and procedures used by the WTO.

According to an explanatory note to the bill, "the creation of a free trade zone within the CIS and its further functioning is the priority task for the CIS member states and is foreseen in the Strategy of the CIS Economic Development until 2020, which was approved by the CIS Heads of Governments Council on Nov. 14, 2008."