Ukraine's Foreign Trade

The main problem of Ukraine's foreign trade is the low competitiveness of those international market sectors of goods and services that are undergoing the most dynamic development, and determining the future of the world economy. Goods with an insignificant level of added value and a low share of high technology dominate Ukraine's present-day export. Ukraine's image is increasingly becoming that of a supplier of semi-finished goods which are produced by branches consuming much capital, energy, materials and labour (mostly by work requiring mid-level qualifications), and characterized by a low level of environmental safety. This vector for increasing exports contradicts the structural priorities of Ukraine's economic development. Under conditions of limited domestic demand, export growth over the last years has started to become the catalyst for the economy's structural simplification. Based on this, the following strategic goals of Ukraine's foreign trade policy can be defined: the development of the country's export potential, based on such points of reference of national economy's international specialization that would become organically united with the directions of structural economic changes convenient for Ukraine (while maintaining a balance between domestic and foreign demand for Ukrainian goods and services); the restructuring of export, and bringing it closer to the proportions that are characteristic of those in developed countries; giving priority to sectors that influence the future of the world economy: electronics (including microelectronics); the equipment of new (untraditional) types of power engineering, and the production and processing of new types of materials with predetermined properties; biotechnology; a substantial increase in the export of international tourism, science and technology, engineering, consulting, and educational services; the sale of licenses for patented designs and know-how; the creation of competitive, financially powerful transnational corporations; the mastering of global marketing and investment strategies, as well as the forms and methods for large-scale international co-operation projects, by Ukrainian companies; the diversification of the geographic foreign trade structure directed toward removing the over-dependence on individual countries (markets), and increasing the level of Ukraine's economic security; the ensuring a stable balance between exports and imports, as well as Ukraine's trade and current payment balances as a precondition for removing the country's one-sided dependence on the inflow of foreign capital and credits.

Ukraine's strategic goal should continue to be its foreign trade policy oriented toward increasing exports. However, the model for such a policy needs substantial changes. The continuation of today's policy is without prospects, where export increases are the result of "pushing" abroad production that has no domestic market (due to limited solvent demand). This is all the more the case when this automatically leads to an increase in energy resource imports.

Ukraine's foreign trade strategy should be defined with the following in mind: (1) more active use of political, diplomatic, and other measures for breaking down the barriers on the path of Ukraine's exporters entering foreign trade markets; (2) countering discriminatory measures applied by Ukraine's trade partners by improving the regulatory-legislative base and mechanisms for providing consulting, information, legal, and other forms of state support to exporters; (3) the co-ordination of acceptable conditions for Ukraine regarding its entry into the WTO (proceeding from its long-term national interests), as well as the conditions for joining international integration unions (EU, CIS, etc.). Such conditions should provide for the consistent liberalization of import, while retaining the possibility for the limited use of protective means UCEPS.