Ukraine Open for INVESTMENT Open for MANUFACTURING Open for FREE TRADE
Reasons to invest in Ukraine 1
5
Area & Location:
603,500 sq. km, largest country within Europe
Deep and Comprehensive Free Trade Agreement with EU
Geographical center of Europe, making the country an ideal trade hub to the EU, Middle East and Asia
Free trade with CIS, EFTA, FYROM, Georgia, Montenegro, Macedonia
Borders Poland, Romania, Slovakia, Hungary and Moldova, Belarus and Russia, and via the Black Sea, Bulgaria, Georgia and Turkey
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Ground Floor Opportunity:
• Bold structural reforms unlock growth potential incl. robust deregulation • Large consumption gaps = significant upside, at 10-50% CEE peers’ level in most categories • IMF estimates growth in 2016
FTA’s:
Finished negotiations with Canada. On-going negotiations Israel and Turkey
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Attractive Entry • Valuations:
44
Competitive Advantages:
Leading globally in IT outsourcing and Agribusiness • Highly skilled workers at cost• Valuations discounted competitive wages significantly vs. peer countries • Low-cost, rapid logistics to EU, Middle • FDI key priority for Ukraine East, Asia • Most EU-hubs within 2 truck days away
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FTAs’ Benefits for UA-Based Manufacturers Under FTAs UA exports enjoy increased price competitiveness in foreign markets
Cheaper Substantial elimination of all customs duties. Making UA imports more competitive
Faster
Predictable
Goods movement facilitation via customs and setting common rules on technical and sanitary standards
More foreseeable policy environment (incl. FDIs, IPRs, competition rules and public procurement)
Without FTA:
With FTA:
Tariff Savings
Importers of UA exports pay regular import duty (e.g. 10%).
Importers pay no import duty or “preferential” lower duties (e.g. 2%)
Cheaper Inputs
UA-based manufacturers benefit from cheaper inputs imported without (or with lower) import duties and under predictable conditions from FTA partners - in addition to having access to inputs locally available 4
Ukraine’s Network of Free Trade Agreements
European Union (28 Member States) Entry into force: provisional - 1 Former Soviet Union Republics (CIS FTA and January 2016. Unilateral preferences bilateral trade agreements) for UA exports applied (pending Armenia, Azerbaijan, Belarus, Kazakhstan, ratification by all EU Member States) Kyrgyzstan, Moldova, Russian Federation, Tajikistan, Turkmenistan, Uzbekistan Generalized Systems of Preferences EFTA States (Iceland, Liechtenstein, liberalization of trade in goods + Montenegro Macedonia (GSP) Canada and Scope: Norway Switzerland) services + government Entry intoEuropean force: CISUnion(*), FTA 20 September 2012, Entry into 1 5 January July 20012013 procurement + Ukraine Canada, Japan, Turkey Initialed onforce: 14 July 2015 Ongoing negotiations Entry into force: 1 June 2012 legislative approximation and bilateral treaties entered into force between Ukraine 1994 hasgradual concluded 16 and United States Israel and Turkey FTAs economic with + and 2006 Scope: liberalization of trade covering a total of 45 countries Scope: liberalization of integration trade in in goods goods +the EU Scope: liberalization of trade in goods + (*) GSP arrangement will be terminated in Internal Marketby Ukraine with a services (first agreement concluded government procurement services + government procurement two years after the entry intoinforce of the non-CIS state) Scope: liberalization of trade goods EU – UA DCFTA (1 January 2016) Population: combined EU-28 States Population: mil Population: approx. approx. 0.62 35EFTA mil Population: combined States approx. mil Total population: approx. 245 mil Population: approx. 500 2.1 mil Scope: liberalization of trade in goods 13 mil 3
Opportunities under EU-UA DCFTA
Removal of
Market access
97%
500 million
of duties
consumers
Ukraine and the EU signed the Deep and Comprehensive Free Trade Area on 27 June 2014, as part of the broader Association Agreement Provisional application of DCFTA starting from 1 January 2016. Unilateral preferences for Ukrainian goods applied Removal of 97% of duties on Ukrainian goods and reduction of the average tariff on Ukrainian exports from 7.6% to 0.5% 5
OPEN FOR U OPEN FOR INVESTMENT OPEN FOR MANUFACTURING
OPEN FOR FREE TRADE
THANK YOU! www.me.gov.ua 6