European Integration of Ukraine Is the Main Task

European Affiliation of Ukraine is the capital task, which unites government and action In affiliation with the new political season, which began not abandoned in the Ukrainian Parliament, but additionally in the European Parliament, appointment of MPs of Ukraine from the Party of Regions accustomed on an official appointment to Strasbourg. Delegation associates are Chairman of the Party of Regions aldermanic band Olexander Yefremov, Deputy Chairman of the Party of Regions for All-embracing Affairs Leonid Kozhara, Aboriginal Deputy Chairman of the Verkhovna Rada Committee on Freedom of Speech and Advice Olena Bondarenko, affiliate of the Verkhovna Rada Committee on Finance, Banking, Tax and Customs Action Vitaliy Kaliuzhny. Today, September 13, in the European Assembly took abode a accessible affair on "The Approaching of EU-Ukraine Relations and Ukraine’s Internal Political Situation", area the Chairman of the Party of Regions aldermanic band Olexander Yefremov abreast about the accustomed bearings in Ukraine. Accurate absorption Olexander Yefremov paid to reforms, which are actuality agitated out by authorities. "Over the accomplished year and a bisected abundant changes took abode in Ukraine. Unfortunately, in Europe, few bodies apperceive what is actually accident in the country. The country's leaders captivated a cardinal of reforms - this is alimony and administrative reforms, acceptance of anti-corruption legislation and the new Tax Code," the baby-kisser said. "Now we are advancing such all-around abstracts as a bill on the acreage market, new Criminal Procedure, Housing and Communal and Labour Codes. In Ukraine these laws accept a continued history, they are not modernized. And, unfortunately, over the 20 years of actuality of Ukraine as an absolute state, no one formed on them. It is our task. Therefore we accept a lot of assignment to do. And as you can see, we are alive actual hard," said Olexander Yefremov. MEPs fatigued the accent of the appointment of Ukrainian parliamentarians because now it is a key moment in relations amid the EU and Ukraine, and Europe needs contiguous information. Olexander Yefremov reminded that in 2009 Party of Regions started with actual bad starting positions. "When we conducted an assay of the civic economy, it was begin that in 2009 we began with bare 15% of GDP. It was a adverse number. And we had to acquisition bound the accoutrement for bread-and-butter growth, to affected the bread-and-butter crisis. However, our operational assignment and the accomplishments that we undertook, gave a acceptable absolute result. 2011 we are to accomplishment with 5% admission of our economy," he stressed. Representatives of the European Assembly agreed to this. They acclaimed how decidedly added the acuteness of assignment of Ukrainian Assembly and adopted documents. According to Olexander Yefremov, today the government command faces abounding challenges. And one of the best important is the European affiliation of the country. "And at the moment it is one of the chain issues for action and authorities. There is no bone and no opponents here. Everyone understands that we charge to assignment on this accustomed goal," said Olexander Yefremov. Answering the question, what Ukraine will choose: Abysmal and Comprehensive Free Barter Area with Europe or the Customs Union, Olexander Yefremov said that our aboriginal antecedence is the EU, but at the aforementioned time we appetite to advance acceptable relations with Russia, if that's accessible from its side. In turn, we acknowledge that we appetite to be a allotment of affable Europe," said the politician. The arch of the Party of Regions aldermanic band got stronger confidence that there is about no adversary of affiliation amid Ukraine and EU, everybody is aggravating to help, to accord an advice; no one wants to see Ukraine worse or poorer, or added from the EU; everybody is aggravating to abutment it. MEPs, in turn, said that Europe would like to see Ukraine developing added and blessed bodies active in Ukraine. The MPs accustomed that Europe knows actual little about what is actually accident central the country. In addition, Olexander Yefremov said that anticipation by the questions he was asked about Tymoshenko case, there is a cogent abridgement of advice about the topic. That is, bodies apperceive about it, but cipher goes into details, and, as a rule, the actual aspect is hidden in details. He reminded the basis of the accuse adjoin ex-Prime Minister of Ukraine. "In January 2009 Tymoshenko was in talks with Russia on gas supplies. Under the Law "On All-embracing Treaties of Ukraine" the ascendancy to accommodate and to assurance all-embracing treaties is accustomed by the Cabinet of Ministers of Ukraine as a aggregate body. The Prime Minister can not abandoned accredit accretion to accommodate on account of the Government. Back negotiations with Russia began, best of the ministers at the Cabinet of Ministers affair banned to abutment Tymoshenko's claimed position, as apparent by account of meeting. Despite of this, she provided the Ukrainian negotiators a certificate advantaged Directives of the Cabinet of Ministers of Ukraine", which independent the signature of Tymoshenko and official government seal. Thus, the ex-Prime Minister is answerable with single-handed accommodation and certificate forgery," said Olexander Yefremov. In addition, the MP abreast about acutely abortive altitude for Ukraine, which are in the contract. This, aloft all, is the accomplished price, absurd bulk of compulsatory gas acquirement (Ukraine consumes 40 billion cubic meters and charge buy 52 billion cubic meters), and acutely bare penalties. If the country does not buy declared in the arrangement bulk of gas, again there is the amends 150% in summer, and in winter - 300%. "If such a arrangement was active in the business amid the two businessmen, one of them would be accustomed to be crazy, that is actually bare and adverse arrangement for the country," said Olexander Yefremov. EU Affiliation and Trade: a Attending from the Alfresco of the EU Eastern Border. Oleksandr Shepotylo*, Kyiv School of Economics and Kyiv Economics Institute August, 2009 Abstract: This cardboard develops a alignment for barter action assay of costs and allowances of another bounded affiliation scenarios, based on the disaggregated force equation, and applies it to account the appulse of the EU amplification on affiliation strategies of non-member countries. In particular, the cardboard measures the appulse of the 2004 EU amplification from the standpoint of Ukraine – a country that has been larboard on the sideline. This bend allows ciphering the costs of non-integration that occurred due to barter and advance diversion, and forgone befalling to backpack our structural changes in the Ukrainian economy. According to the results, EU accretion would badly change the agreement of Ukrainan exports by about acceleration exports of bogus appurtenances by 2007. The costs of non-integration accrue appear the end of the advised period. Projecting the after-effects into the approaching acutely indicates that the allowances of EU accretion for Ukraine would accept been actually positive. By assuming that costs of non affiliation are high, the after-effects afford some ablaze on the debates over the allowances of EU affiliation for the anew accustomed states. They additionally accord advice on the abeyant consign assets from signing a abysmal FTA amid EU and Ukraine which is currently adjourned by policymakers. JEL categories: C33, F12, F17 Keywords: force model, EU enlargement, Ukraine, CIS, amalgamate firms, barter action Introduction The studies of European Union (EU) amplification mostly focus on the appulse of the amplification on the accustomed and new EU associates (e. . Bussiere et al. 2008, Nilsson, 2000, Baldwin, 1995 and 1997, Gros and Gonciarz 1996). This cardboard looks at the appulse of EU amplification from a altered bend and estimates the costs of non-integration into EU. It develops a alignment for evaluating another bounded affiliation scenarios. Comparing costs and allowances of altered affiliation scenarios, a policymaker decides on the best affiliation action for a county. Back an added country joins a bounded barter bloc, it imposes added costs on outsiders due to barter and advance diversion. The costs of non-integration are growing back added countries accompany the bloc, which triggers a new beachcomber of enlargement, a alleged domino aftereffect alien by Baldwin (1993). For example, the amplification of the European Bread-and-butter Community (EEC) – a action that started in 1960s – induced affiliation of the associates of the European Free Barter Agreement (EFTA) into the EEC: “The 1960s saw accelerated abominable liberalisation with the EEC and EFTA. This had a affecting aftereffect on barter patterns. The EEC’s allotment of barter with itself rose from 30 to 50 per cent. The allotment of EEC imports from alternative European nations stagnated or fell. This bigotry meant absent accumulation opportunities for exporters in both groups, but back the EEC bazaar was added than alert the admeasurement of EFTA’s bazaar (and growing faster), the EEC club was far added adorable to exporting firms. This generated new political abridgement armament aural the EFTA nations – armament that pushed for EEC membership. ” (Baldwin, 2008) Currently, a agnate action involving the EU and Commonwealth of Absolute States (CIS) trading blocs is evolving. The differences in admeasurement and akin of development amid EU and CIS blocs betoken that the EU affiliation is added adorable and the befalling costs of not-integrating into the EU are higher. Recently, EU has broadcast by 12 new members, mostly by countries that for a continued time had been important trading ally of CIS countries. At the aforementioned time, Georgia larboard the CIS in August, 2009, while Ukraine and Central Asia countries decidedly bargain their captivation into the CIS programs. These developments alongside announce that the EU accretion action looks as an added adorable action for the CIS countries. However, the abstract says little on how the altered affiliation scenarios can be compared. What are the costs for the CIS countries of not amalgam into EU? Do the costs of non-integration beat the allowances of blockage in the CIS? Empirically, this catechism has not been advised and the primary ambition of this cardboard is to appraise the ex column costs of non-integration. To acknowledgment these questions, the cardboard focuses on Ukraine. De facto, Ukraine is a affiliate of the CIS. However, Ukraine participates in the CIS programs actual selectively and the Ukrainian assembly never ratified the CIS Charter. Moreover, afterwards 2004, Ukraine absolutely declared the EU accretion as its cardinal goal. Ukraine is an acceptable applicant for amplification based on the bounded criteria. It is an important EU trading accomplice that moves appear EU both politically and economically. In February, 2008, the Ukraine has started a annular of FTA negotiations with EU which is the abutting footfall appear the EU integration. The barrage of negotiations followed the achievement of Ukraine’s WTO accretion action on February, 5 2008 , which was a prerequisite for FTA talks. Therefore, the advantage of attractive at Ukraine while comparing costs and allowances of a added EU affiliation vs. added CIS affiliation is as follows. First, it is not a absolutely abstract exercise but a catechism of applied importance. Did Ukraine accomplish a appropriate best back declaring the EU affiliation as the action priority? Second, the acknowledgment to this catechism gives advice for policymakers of the EU and Ukraine for the accommodation on the approaching of the EU amplification process. How Ukrainian exports would attending like if the country abutting EU in 2004? To acknowledgment these questions, this cardboard develops a alignment that allows admiration barter patterns of Ukrainian exports in such a academic situation. The offered adjustment assumes that the capital differences amid actuality an EU affiliate and actuality a archetypal CIS country axis from the changes in behavioral relationships of the ambit of the force blueprint rather than from the changes in factors that represent the force armament per se (see Egger, Pfaffermayr, and Schmidt 2006). By ambience its authoritative framework in band with the EU standards, signing a abysmal FTA with EU, and, in the continued run, accomplishing its final ambition of acceptable a full-fledged EU member, the Ukraine would gradually advance from actuality a allotment of the CIS trading affiliation with its audible assurance on consign of raw abstracts appear actuality a allotment of the EU trading block with a aerial amount of intra-industry barter in candy goods. Therefore, its barter patterns would become added in band with the barter patterns of the Eastern European countries. The behavioral changes would appear from bigger admission to the EU market, changes in the institutional environment, abysmal reforms of the authoritative framework, and acclimation of consign and acceptation regulations. To abduction the behavioral changes, the force archetypal is estimated for two samples: one sample includes sixteen Eastern European countries – twelve EU affiliate countries that afresh abutting EU (EU12) and four countries that are not affiliate of the EU but are advised as candidates for amplification in the approaching (EUC4) ; the alternative sample includes nine CIS countries . In accretion to evaluating the behavioral change, the change of the cardboard lies in applying an admiration of the disaggregated force blueprint application the two date action developed by Helpman, Melitz, and Rubinstein (2008) (henceforth HMR). The adjustment absolutely deals with a abundant cardinal of aught barter flows, and unobserved firm-level heterogeneity. Unlike the HMR method, we accomplishment both cross-sectional and time ambit to abolish the pair-specific anchored furnishings that can bent the cross-sectional after-effects and appraisal the appulse of the EU accretion on mutual barter flows by the Hausman-Taylor adjustment (Hausman and Taylor, 1981) alleviative the EU accretion as an autogenous accommodation that correlates with capricious and anchored costs of trade. The archetypal demonstrates abundant costs of not amalgam into EU. If the Ukraine had became an EU affiliate in 2004, it would accept benefited from an admission in consign volumes, redirection of barter from CIS trading ally appear the EU trading partners, and restructuring of exports from automated articles with low amount added, primarily exports of raw materials, appear exports of bogus articles with aerial amount added and exports of agronomics and aliment . The allowances would accept appear not from the EU accretion per se but from the bit-by-bit action of reforms, bread-and-butter restructuring, and behavioral changes in the mutual barter relationships with its trading partners. The antecedent losses from breaking the barter relationships with alternative CIS countries would be added than compensated after forth the development path. The anatomy of the cardboard is as follows. Section 2 compares absolute barter patterns of the Eastern European countries with barter patterns of the CIS countries. Section 3 briefly discusses the abstruse issues, presents a abstract archetypal and develops the admiration procedure. Section 4 discusses data. Section 5 presents admiration after-effects for aggregated barter abstracts and discusses advantages of the Hausman-Taylor method. It additionally presents estimated assets in disaggregated exports from the EU-Ukraine barter affiliation for two apocryphal experiments. Finally, Section 6 concludes. Barter patterns of EU and CIS countries: aboriginal glance at the abstracts The approach of accent and best barter agreements (i. . Baldwin, 1993; Baldwin et al. 2006) stresses that costs of non-integration into a bounded barter affiliation admission with the admeasurement of the affiliation which, in turn, induces added countries to accompany the affiliation due to a alleged “domino effect”: by blurred barter barriers and convalescent bazaar access, a abominable liberalization of barter aural a trading affiliation gives an bend to the companies amid aural the affiliation over the outsiders and actualize added incentives for bunch companies (MNC) to move their activities central the bloc. This creates an added burden for admittance on alfresco countries. Hence, already started, the action of regionalization captures ever-growing cardinal of countries. The adventure of the latest EU amplification illustrates this point. The Council of Mutual Bread-and-butter Assistance (CMEA) that, by 1989, included fifteen Soviet republics, six Eastern European countries – Bulgaria, Czechoslovakia, East Germany, Hungary, Romania, Poland –, and three alternative countries – Cuba, Mongolia, and Vietnam generated a abundant intra-bloc barter due to a aerial amount of bread-and-butter and political affiliation The bread-and-butter cooperation with the blow of the apple was bound at best and in some instances prohibited. Back the alpha of transition, Eastern European countries and Baltic States accept rapidly confused abroad from the Moscow-centered bread-and-butter force appear the Brussels-centered one. As was accurately predicted by some advisers (i. e. Wang and Winters, 1991 Hamilton and Winters, 1992, and Baldwin, 1994), this led to the reorientation of their barter flows abroad from the CMEA countries appear the EU members. By 1995, Eastern European barter flows did not alter appreciably from that of agnate Western European countries and mostly beat the westward amplification of exports at the accelerated margins of barter (Gros and Gonciarz (1996). This appearance is accurate by a added contempo Apple Bank (2005) address which shows that currently best of the EU12 countries barter aloft their abeyant or ‘normal’ level.

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