October 24, 2013 10:34
Ukraine and Belarus boost trade ties
Ukraine’s government has approved agreement signed on May 22, 2013 between Ukraine’s Cabinet of Ministers and the government of the Republic of Belarus on interregional and cross-border cooperation.
Government experts say the pact encourages full use of the potential of both parties in the sphere of interregional cooperation, consolidates traditional friendship and mutually beneficial ties between the two countries.
Analysts note that Belarus has taken a pragmatic position on the Association Agreement between Ukraine and the European Union, which is scheduled to be signed in Vilnius in late November.
Belarusian President Aleksandr Lukashenko has clearly stated that he sees no problem with the EU-Ukraine agreement. Lukashenko does not perceive the agreement as a trade barrier, but as an instrument opening new opportunities for mutually beneficial cooperation.
Experts say the balanced position of Belarusian leaders is not only due to traditionally friendly relations between Ukraine and Belarus, but to a pragmatic approach in the economic sphere.
Ukraine is Belarus’ second most important trade partner. Trade turnover between the two countries on in 2012 amounted to 7.5 billion USD. Belarus exports to Ukraine over 500 types of products and imports 700 types of Ukrainian products.
Analysts say among CIS countries Ukraine has a negative foreign trade balance with only two states: Russia and Belarus. Over the first 8 months of 2013, Ukraine posted a 3.4 billion USD negative trade balance with Russia (compared to 9.8 billion USD in 2012) and a 2.8 billion USD negative trade balance with Belarus (compared to 2.8 billion USD in 2012).
The structure of the Russian and Belarusian exports to Ukraine is an important factor. Ukraine imports mainly raw materials and semi-finished products from Russia, and goods with a high level of processing from Belarus.
Analysts say in the event of any restrictions on the supply of Ukrainian products to the countries of the Customs Union, Ukraine will be forced to impose retaliatory measures. Belarusian exports to Ukraine are not very diversified. If mutual economic constraints are introduced, Belarus will become even more dependent on Russia, something the Belarusian leaders are trying to avoid.
Analysts say that after the signing Association Agreement with the EU, the Belarusian government will seek to avoid trade conflicts with Ukraine. Instead, Belarus will attempt to use the agreement as a bridge to establish closer economic cooperation with the countries of the European Union.
Experts say areas of cooperation in the medium term between Ukraine and Belarus include the energy sector and scientific-technical cooperation.