It shows that Russia’s fears of a reorientation of Ukraine trade towards the West have become reality. This blog post, based on our more comprehensive study ( here), details the deep shifts in Ukrainian trade that have occurred in the past five years. Ukraine had to reorient its trade relations from Russia to the EU and other partners in a relatively short period, similar to the experience of several countries of central and eastern Europe in the early 1990s. On the other hand, the DCFTA with the EU opened up new trade and investment opportunities. Russia had long been Ukraine’s main trading partner and both economies were deeply interlinked from Soviet times. The military conflict and subsequent Russian trade sanctions dealt a heavy blow to the Ukrainian economy. Russia responded by unilaterally revoking its own bilateral free trade agreement with Ukraine, which had been in place since the dissolution of the USSR at the end of 1991. Despite the European Commission’s efforts to avoid a trade conflict through a one-year postponement and trilateral negotiations, the DCFTA eventually entered into force on 1 January 2016. In the following months, Russia continued to exert pressure to stop the Association Agreement, or at least its trade component, the Deep and Comprehensive Free Trade Area (DCFTA), which Russia (wrongly) judged detrimental to its interests, arguing that zero-duty imports from the EU into Ukraine could easily ‘leak’ into Russia. Though temporarily successful, this pressure triggered the Euromaidan protests in November 2013, which eventually led to collapse of the Yanukovych regime in February 2014 and subsequent Russian military intervention. In fact, in 2013, economic pressure was used to try to persuade Ukrainian President Viktor Yanukovych not to sign the Association Agreement (AA) with the EU. Read it here.ĭuring the past six years, Ukraine has been a victim of heightened Russian aggression – militarily, politically and economically. This blog post is based on the Policy Contribution " Six years after Ukraine’s Euromaidan: reforms and challenges ahead".
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