The FINANCIAL — On 1 January 2016, the European Union (EU) and Ukraine started applying the Deep and Comprehensive Free Trade Area (DCFTA), which forms part of the Association Agreement signed in June 2014. The rest of the Association Agreement has already been in force since November 2014.
The application of the DCFTA constitutes a milestone in EU-Ukraine bilateral relationship, as it offers new economic benefits to both sides. Ukrainian businesses receive stable and predictable preferential access to the largest market in the world with 500 million customers, while EU businesses will be able to benefit from easier access to the Ukrainian market and build new relationships with Ukrainian suppliers and cooperation partners.
This will also be to the benefit of Ukrainian citizens, as they will have better access to high quality products. Increased competition and the lowering of import tariffs should lead to lower prices, according to EU Neighbourhood Info.
The EU Trade Commissioner Cecilia Malmström expressed confidence in the prospects for Ukraine: “The entry into force of this trade area on 1 January 2016 creates unique opportunities for Ukraine to stabilise, diversify and develop its economy to the benefit of all its citizens. Assistance from the EU will be made available to help Ukrainian SMEs seize these new opportunities, to grow, and thereby create jobs. EU businesses will benefit as well by gaining improved access to a market of 45 million people. The change will not occur over night, it will require work and investment. Gradually, the DCFTA will contribute to a prosperous Ukraine and to stronger economic integration with the EU.”
The DCFTA will also contribute to the improvement of the business climate in Ukraine. It will attract foreign investment, helping Ukraine to further integrate with the world economy. The DCFTA is foreseen to be implemented over several years, allowing gradual legislative alignment and time for all affected stakeholders to adjust.