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You're reading: 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.”

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