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Foreign
trade can be considered a number of different things, depending on the type of
trade one is talking about. Generally speaking, foreign trade means trading
goods and services that are destined for a country other than their country of
origin. Foreign trade can also be investing in foreign securities, though this
is a less common use of the term. Foreign
trade activity are activity of Ukrainian and foreign subjects of the economic
activity, constructed on mutual relations between them and taking place both in
territory of Ukraine, and behind its
limits. One of the basic legislative
documents in the field of foreign trade activities is the Law of Ukraine from
16.04.91 "On foreign trade activity".
According
to data of 2011, the EU's share in
total foreign trade turnover is 29.6%. So is a restoration of growth trends and
the deepening of bilateral relations between Ukraine and the EU. However, in
bilateral trade between the countries during 2005 - 2010 remains negative
balance, performance is significantly increased in 2007 - 2008 years, and
recent years (2009 - 2010) gradually reduced. In 2010, exports of goods and
services with the European Union's total foreign trade of Ukraine amounted to
16,182.9 million U.S., that to 3663.1 million U.S. more than in 2009[2]. What is the evidence of better planning of foreign economic
activities as at the state level, and individual enterprise.
Let's
look at Ukraine in global ratings (Table 1). This rating is well illustrated by
all the problems of foreign trade of Ukraine.
Table
1. Ukraine in global ratings
|
Indication |
Position |
|
2011-2012 Global
Competitiveness Index |
82 out of 142
countries |
|
2012 Ease of Doing
Business Index |
152 out of 183
countries |
|
Economic Freedom of
the World |
125 out of 141
countries |
|
Freedom to Trade
Internationally |
69 out of 141
countries |
Ukraine
has made substantial progress in reducing barriers to trade during its
accession to WTO, in particular by consolidation of tariff rates and
unification of customs procedures. However, a number of severe impediments
remain, as outlined below.
The
biggest barrier to foreign trade in Ukraine is the regulatory and legal
environment. Importers as well as exporters face complicated, lengthy customs
procedures. There is no stability in legislation, even after Ukraine became a
member of WTO. The temporary 13% surcharge imposed by the government and then
canceled – was a good illustration of this statement.
On
Transparency International’s Corruption Perceptions Index, Ukraine is ranked
many years in the bottom half of the group of 163 countries. Ukrainian
government employees voluntarily apply licensing and registration procedures to
halt or slow exporting or importing operations. That is why corruption is named
as one of the most serious deteriorations of foreign trade.
Ukraine’s
complex system of certifying imports imposes one of the greatest barriers to
importers. The international practice according to which products certified by
accredited bodies in partner states with internationally recognized
accreditation procedures have to be recognized as acceptable in the importing
country does not work in Ukraine. The procedures for certifying compliance with
Ukrainian standards for agricultural products, food, and pharmaceuticals are
particularly complex.
Difficulties
in Obtaining Refunds for VAT are one of the most severe impediments to exports
from Ukraine. The problem is the corruption embedded in the system that
provides rebates to exporters for the value-added tax (20%) they pay on inputs.
The government consistently delays payment (up to 18 months) or the tax
authorities challenge the veracity of the exporters’ claims. This
problem appears to be profoundly systemic, because all the CIS countries suffer
from it.
Investment and Trade Foundation presented
an analysis of the current legal environment for foreign trade in its paper
“International Trade. Ukraine” that may be used as a guide for companies
interested in trade with Ukraine. Investment and Trade Foundation recommends
hiring local law firm to obtain a legal advice.[3]
By
way of conclusion Ukraine was an active player in the field of regional trade liberalization
by signing the FTA with CIS countries and almost completing negotiations on
establishment of the extended free trade area with the EU. However, in my
opinion, the biggest achievement of Ukraine in the field of foreign trade is
comprehensive customs reform. It is intended to harmonize domestic customs
legislation with the standards of the World Customs Organization and,
hopefully, make Ukraine an import-friendly country, allowing relatively smooth
movement of goods through its customs border.
Literature:
1. Mariya Nizhnik, Oleksandr
Tereshchenko. Foreign trade in Ukraine: Trends of 2011/ Ukrainian law firms
2012, p. 64-65
2. http://www.ukrstat.gov.ua/
3. http://inve-trade.eu