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Aid for Trade Needs Assessment Ukraine: Trade and Human Development Igor Burakovsky, Institute for Economic Research and Policy Consulting (Ukraine) 14 June, 2011 United Nations Development Programme
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Main Findings 1.International trade plays an important role in Ukraine’s. Ukraine’s economic growth has been predominantly determined by external factors 2.Rather liberal trade regime established: low import tariffs, free trade areas with key trade partners (FTA with EU is currently negotiated). Obstacles to trade are mostly of domestic nature. 3.Trade policy agenda: addressing more complicated tasks of internal reforms and reduction of non-tariff barriers
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Main Obstacles to Trade (1) Customs: fiscal bias, corruption, burdensome procedures, inconsistent legislation – in-depth reform is necessary; Transport and logistics services – poor quality for high prices: railway sector - obsolete rolling stock, inefficient state management; road sector – large number of small companies (less than 10 trucks), 2000 class IV and class V trucks (out of 22000), acute shortage of investments; acute shortage of modern warehouse capacities, etc.
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Main Obstacles to Trade (2) Technical regulation: new laws (on standardization, on confirmation of conformity, on accreditation of conformity assessment bodies, etc.) are in place but legislative inconsistencies remains; implementation of technical regulations is rather low; system of supervision over product safety (market surveillance) has yet to be established; long list of products subject to compulsory certification; low speed of revising standards in force (cancellation of outdated ones and harmonization of the rest with international and European standards, etc); proper institutional and technical capacities are to be developed.
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Main Obstacles to Trade: view of entrepreneurs List of problems is rather impressive: paying customs fees; confirming origin of goods; confirming customs value; confirming registration of goods/contracts; licensing; obtaining permits, etc. Problem No. 1 Importers: logistics problems and customs clearance, corruption Exporters: VAT refund and regulatory measures (veterinary, sanitary and phytosanitary control), corruption
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Main Recommendations (1) Ukraine’s trade policy goal: to ensure efficient involvement in international trade system and to use efficiently opportunities offered by free movement of resources in the globalization era. New quality of trade policy making: trade policy as consistent proactive process; trade policy as structured process (situation analysis, formulation of strategy and necessary policy tools, practical implementation, monitoring and evaluation);
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Main Recommendations (2) What to do is clear. But priorities are to be identified: Ensuring a stable macroeconomic environment; Favorable environment for business; Developing and upgrading human capital and physical infrastructure for business; Improving the operation of market institutions; Increasing the private sector ability to make competitiveness goods and services. Observance of relevant standards and requirements – strategic tool to strengthen positions in traditional markets and to access a new one;
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Main Recommendations (3) Strengthening competition policy; Developing education and science; Addressing trade related issues of the labour market and environmental protection; Using information and communication technologies in both business and public administration; Participating in regional economic cooperation; Assessing the impact of globalization on internal socioeconomic processes;
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Thank you! Contact information: Institute for Economic Research and Policy Consulting www.ier.com.ua institute@ier.kiev.ua 8/5-А Reytarska str., Kyiv 01034, Ukraine Phone +38-044-278-6360 Fax +38-044-278-6336
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