The presentation points out lessons, which can be drawn from EU-Ukraine DCFTA negotiations. European integration and a sensible approach with the EU market can be points of orientation for future agreements. Valeriy Piatnytskyi managed the Ukrainian team during the EU-Ukraine DCFTA negotiations. He is also former advisor to the Prime Minister of Ukraine. Further information: Stakeholder Dialogue in Cooperation with the AHK Tunisia - Negotiating ALECA – Lessons Learned from the DCFTAs with Ukraine, Moldova and Georgia. Organizer: Bertelsmann-Stiftung in Cooperation with the AHK Tunisia Date: Wednesday, 27-28 June 2018.

1. DCFTA Ukraine – EU :
Lessons learned
Valeriy Piatnytskyi
Former DCFTA Chief Negotiator
Ukraine

2. The EU-Ukraine Association Agreement
Initial steps
2007 - Ukraine and EU reached political agreement on
the conclusion of the AA;
2008 -2012 - 21 negotiation rounds on AA and 18 – on
FTA;
2011 - the parties announced the completion of
negotiations on the future AA;
2012 - the text of future Agreement has been initialed
by both Parties;
2013 – Plan on Priority Measures for European
Integration of Ukraine for 2013.

3. The EU-Ukraine AA
Signing
March 2014 - the new Prime Minister
of Ukraine and EU leaders sighed the
Political provisions of the AA.
June 2014 - Economic and Sectorial
part of the AA was signed by the new
President of Ukraine.
"In Kyiv and elsewhere, people gave their lives for this
closer link to the European Union. We will not forget this.“
Herman Van Rompuy
September 2014 - the AA was simultaneously ratified by the
Parliament of Ukraine and the European Parliament.

4. The EU-Ukraine AA
The EU-UA AA counts in total over 1200 p. and comprises of:
 A Preamble as an introductory statement of the
Agreement, setting out the Agreement’s purpose and
underlying philosophy;
 Seven Titles (General Principles; Political Cooperation
and Foreign and Security Policy; Justice Freedom and
Security; Trade and Trade related matters (DCFTA);
Economic and Sector Cooperation; Financial Cooperation
with Anti-Fraud Provisions; Institutional, General and Final
Provisions);
 43 Annexes “setting out the EU legislation to be taken
over by a specific date”;
 Three Protocols:
definition of the concept of "originating products" and methods of
administrative co-operation;
mutual administrative assistance in customs matters;
general principles for the participation of Ukraine in Union programs.

5. Provisions
Values and Principles: common values - democracy and rule of law,
respect for human rights and fundamental freedoms, market economy and
sustainable development;
Enhanced cooperation in foreign and security policy, with the focus on
regional issues;
A DCFTA, not only the mutual opening of markets for most goods and
services, but also binding provisions on gradual approximation with EU
norms and standards in trade and trade-related areas;
Justice, Freedom and Security, based on the Visa Liberalization Action
Plan;
Energy (including nuclear) with particular focus on issues concerning
security of supply, gradual integration of energy markets, energy efficiency,
renewable energy sources and nuclear safety;
Enhanced cooperation in 28 key sector policy areas, based on gradual
approximation to EU acquis and, where relevant, with international norms
and standards.
The EU-Ukraine AA

6. EU - Ukraine DC FTA
 Fully operational from 1 January 2016:
“The Parties shall progressively establish a
free trade area over a transitional period of a
maximum of 10 years starting from the entry
into force of this Agreement…”
 Based on WTO principles and agreements, it
enhances their meaning for the purposes of
bilateral trade
 Covers trade in goods and services, public
procurement, IPR, sustainable development,
competition policy, trade facilitation, etc

7. EU – Ukraine DC FTA (cnt’d)
 Immediate elimination of import duties on
over 97% of products exported from Ukraine
to the EU, including ag.products (only 3% of
certain agricultural products – TRQs at 0%
rate).
 Legal harmonisation/alignment with the EU
acquis (TBT, SPS, etc)
 Original English text available at:
http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.L_.2014.1
61.01.0003.01.ENG

8. AA implementation,
incl. EU acquis
 September 2014 the Government
adopted the Action Plan on
implementation of the Association
Agreement (488 actions for 2014-2017)
 Q1 2015 the Government approved the
implementation plans of different
executive bodies to introduce pieces of
the EU legislation

9. DCFTA Structure
TRADE IN GOODS AND MARKET ASSESS
TRADE IN SERVICES & CAPITAL MOVEMENT
TERMS OF TRADE
National treatment and
market access for goods
Trade remedies TBT SPS
Establishment, trade in services
and electronic commerce
Current payments
and movement of capital
Customs and
trade facilitation
Public
procurement
Intellectual
property
Competition
Trade-related
energy
Transparency DSTrade and sustainable development Mediation

10. Changes in Custom Duties Rates
Average Custom Duties, %
Before AA After AA in
force
11th year
Ukraine EU Ukraine EU Ukraine EU
Total
4,95 7,6 2,42 0,5 0,32 0,05
Agricultural Products
HS 01-24 9,24 19,8 6,77 0,6 1,38 0,24
Industrial and Processed
Agricultural Products
HS 25-97
3,67 3,9 1,12 0,5 0,00 0,0

11. DCFTA is to remove most tariffs and
quotas…
• Removal of import tariffs for majority of
products
• Introduction of substantial quotas on duty-
free exports of key Ukrainian agricultural
products
• Elimination of export tariffs on oil seeds and
skins at the end of 10-year transition period
• Instead, temporary surcharge will be applied
over the first 15 years of the Agreement
implementation.

12. …and non-tariff measures
• EU removes agricultural export subsidies
• Considerable convergence of Ukraine’s
regulatory framework in the Technical
Barriers to Trade (TBT) and Sanitary and
Phytosanitary Standards (SPS) area
• Approximation to EU procedures in
standardization, weights and measures,
accreditation, and conformity assessment
• Regulatory reform in competition policy, state
aid, public procurement etc.

13. Tariff liberalization in trade with EU (1)
 Ukraine within 10 years eliminates import duties.
 For some goods (sunflower seeds, hides and skins,
certain type of ferrous and non-ferrous scrap metal)
special safeguard (additional surcharge) will be applied.
Overall time - 15 years;
 Ukraine within 10 years eliminates import duties on
passenger cars (8703) by 1% per year.
 BUT! safeguard measures can be applied (10% duty)
IF/WHEN:
 (і) import of cars originating from the EU >
than a set limit;
 (іі) share of imports originating from the EU in Ukrainian
market > indicator of a certain year

14. Tariff liberalization in trade with EU (2)
Ukraine applies special conditions for worn clothing :
Ukraine introduces entry prices
(in Euros per kilo net weight).
Entry price = 30% from average
price in 2 precedent years of
customs value of ready-made new
apparel according to a list
Year DCFTA of entry
into force
From 1st to 5th year after entry into
force
6th
Applied duty rate for
the current moment (Х)
minus 0,1 percentage point from
duty rate Х (annually)
0%
Entry prices are published each yeas and are valid for the
current year

15. Tariff liberalization in trade with EU (3)
Elimination of EU import duties on the majority
of goods from the 1st year of entry into force
(99% tariff lines).
 Transition periods 3-10years for
elimination of duties by Ukraine
 For some goods from EU Ukraine
reduces duties only partially (by
20% - 60% during 5 – 10 years).
 EU repeals export subsidies for
agricultural goods in trade with
Ukraine

16. TRQs
Meat of swine, meat of the poultry, sugar

17. 1. Meat of bovine
animals
1. Meat of bovine animals
2. Meat of swine
3. Meat of sheep or goats
4. Meat and edible offal of the poultry
5. Milk and cream, yogurt
6. Milk in powder
7. Products from processed milk
8. Butter and dairy spreads
9. Products from processed butter
10.Birds' eggs and albumins
11.Honey
12.Garlic
13.Sweetcorn
14.Wheat and Cereal flours
15.Barley
16.Oats
17.Maize (corn),
18.Cereal groats, meal and pellets
19.Malt, whether or not roasted
20.Starches
21.Cane or beat sugar
22.Other sugars
23.Processed products from sugar
24.Chocolate and other food preparations
containing cocoa
25.Prepared foods obtained from cereals
26.Tomatoes prepared or preserved
27.Mushrooms
28.Grape and apple juice
29.Sugar syrups (HS 2106)
30.Food preparation
31.Undenatured ethyl alcohol
32.Residues of starch manufacture and
similar residues
33.Cigars and cigarettes
34.Acyclic alcohols
35.Dextrins and other modified starches
36.Finishing agents, dye carriers
TRQs (EU)

18. UKRAINE 2015: TRADE STRUCTURE
Geographical structure Commodity structure
29,68 %
35,15 %
18,39 %
5,33 % 3,94 %
Base metals
Agricultural goods and foodstuffs
Machinery and equipment
Minerals
Chemical industry
Wood, goods from paper
Miscellaneous manufactured goods
Light industry goods
Jewelry
7,51 %
Exports Imports
28,3%
30,9%
10,5%
11,3%
29,5%
16,1%
12,5%
11,2%
EU-28
Asia
CIS
Africa
America
Others

21. Ukraine’s Foreign Trade Balance, $ bln
1.6 1.5 2.1
4.4 4.6 4.2
6.5
10.3 8.8
10.6
-1.9
-6.7
-11.4
-18.6
-5.7
-9.3
-14.2 -15.9
-13.7
-0.5
-20
-15
-10
-5
0
5
10
15
Agricultural products
Other products
14% 13% 14% 17% 25% 20% 19% 26% 27% 32%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
the share of agricultural products in total
exports
ХХ

22. Ukraine’s Agricultural Trade Turnover, 2014
2.7
64%
36%
Export
Import
85%
15%
AsiaEU
77%
23%
CIS
5.0 0.8 2.6 1.2 6.6
90%
10%
2.7 5.0
Africa
4%
96%
LatAm
0.5 0.03
2…
71%
Other
countries
0.8 0.3
ХХ
ХХ
Agricultural Imports to Ukraine, $ bln
Agricultural exports from Ukraine, $ bln

23. 5.0
2.7
2014
4.8
3.3
-
1
2
3
4
5
6
7
8
2013
Import Export
Agricultural Turnover between Ukraine
and EU
$8.2 bln
$7.7 bln
36%
34%
12%
18%
Cereals
Oil and seeds
Food industry remains
Other products

24. Protection of geographical indications
 Ukraine has 16 registered GIs.
 EU has over 3200 GIs.
 For Ukraine : some products are granted
transition periods 7 to 10 years (the EU
will provide technical and financial).
 During transition periods indications, which
coincide or represent the EU GIs, will be
removed. Nevertheless, there is no
prohibition on production of such product
 No right to mark a product by a EU GI.

25. Protected for 10 Years
 Champagne
 Cognac
 Madeira
 Porto
 Jerez /Xérès/ Sherry
 Calvados
 Grappa
 Anis Português • Armagnac
 Marsala
 Malaga
 Tokaj
Protected for 7 Years
 Parmigiano Reggiano
 Roquefort
 Feta
Geographic Indications
DOCUMENT TITLE 25
Article 208 Temporary measures
(3) For a transitional period of 10
years from the entry into force of this
Agreement, the protection pursuant
to this Agreement of the following
geographical indications of the EU
Party shall not preclude these
geographical indications from being
used in order to designate and
present certain comparable products
originating in Ukraine

26. Removing technical barriers to enter the EU
market
 Adopted 5 acts out of 5 EU
acquis
 improved/updated/adopted Laws of
Ukraine: “On general safety of non-
food products”, “On state market
surveillance and control of non-
food products”, “On accreditation of
conformity assessment bodies”,
“On standards, technical
regulations and conformity
assessment procedures”, “On
metrology and metrological
activity ”, etc
 Adopted 25 out of 27
EU technical
regulations
 24 entered into force, 3
will be enacted by
2020.
Horizontal legislation Vertical legislation

27. Ukrainian technical regulations adopted and
entered into force under Ukraine – EU AA
0
2
4
6
8
10
12
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 1
3
11
0
1 1 1
5
0 0 0 0 0 00 0 0
2
6
2
4
3
0
4
1
0
1
0
1
entering into force
addoption

28. Trade in Services
 поступова взаємна лібералізація заснування
підприємницької діяльності
 транскордонне надання послуг
 співпраця щодо електронної комерції
 засади торгівлі іншими видами послуг, зокрема
комп’ютерними, поштовими та кур’єрськими,
телекомунікаційними, фінансовими,
транспортними тощо
 лібералізація заходів сторін стосовно в’їзду та
тимчасового перебування на їх території
надавачів послуг: ключового персоналу, бізнес-
відвідувачів, керівників, спеціалістів, випускників-
стажерів продавців бізнес-послуг, незалежних
фахівців.

29.  International standards and a number of EU directives relating
to banking, insurance and other financial services;
 Free movement of capital in certain areas, such as direct and
portfolio investments and cross-border loans from the EU;
 Free movement of capital should be followed by liberalization of
the foreign currency control restrictions currently in force;
 Prudent regulatory framework for financial market supervision
equivalent to existing in the EU;
 Free access of financial institutions to payment and clearing
systems;
 New financial services.
EU-Ukraine DCFTA (Services)

30. Successful Negotiations are Based on:
 Knowledge
 Good understanding of the objective
 Stable professional team (& good
interdepartmental coordination)
 Political will/support
 Efficient communication (government &
business)
 Clearly formulated tasks and assignments
for the team
 Commitment to a sustainable result

31. EU Market Access Negotiations:
what you need to know? (1)
 Customs duties and trade
regimes/agreements:
duties applied to third countries on a general
basis (ERGA OMNES)
Preferential duties, TRQs, depending on terms
and conditions of a trade agreement or applied
trade regime
Antidumping duties and safeguard measures
Rules of origin and confirmation of origin
VAT and excise duties
Domestic support to agriculture
Trade, financial and output statistics

32. EU Market Access Negotiations:
what you need to know? (2)
Requirements of general and specific character:
General - procedures, imports are to be
complied with (customs docs, invoices,
insurance, etc)
Specific - labeling, packaging of goods for
entry the EU market, technical standards,
safety of products, marketing standards for
each specific product, etc.
NB! The requirements are harmonized for all
28 EU Member-states

33. EU market requirements
 Legislative: each product sold in the EU is
subject to regulations that ensure the products
are safe, protect human health, protect the
rights of consumers and are not damaging to
the environment (SPS and TBT)
 Market demands: a product will be subject to
consumer and/or customer demands e.g.
product specications, price, quantity,
timeliness of delivery.
 Private standards: a product intended for a
supermarket chain may have to comply with
private standards (as part of market
demands).

34. Progress in negotiations
Negotiating
Business/experts
Team
Interests and
needs of producers
Consultations with business/experts
• Analytical and
position papers;
• Round tables;
• Conferences;
• Consultations with
producers;
• Cooperation with the
mass media;
• etc

35. Coordination Mechanism for
European Integration
35
Ukraine - EU Summit
Sub-committees
Association Committee
Association Council Parliamentary
Association
Committee
Civil Society
Platform

36. 36
Association Agreement
between the EU and
Ukraine
Action Plan for
implementation of the
GoU Action Programme
Plans for Implementation
of the EU legal acts
GoU Action Plan for AA
Implementation
for 2014 - 2017
EU-Ukraine Association
Agenda
GoU Action ProgrammeNBU’s Action Plan for AA
Implementation
European Integration:
Strategic documents

37. Thank you for attention!
Valeriy Piatnytskyi
E: pyatnytskiy@yahoo.com
E: piatnytskyi@gmail.com