Volume 48 (2014) / Issue 4
Two regional trade agreements have been at the centre of attention in Ukraine: the Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU and the Russia-led Eurasian Customs Union (ECU). Arguably they were the source of the fall of the Yanukovych government and the hostilities in Eastern Ukraine in the spring and summer of 2014. This article argues that a trade policy that is global in perspective and the lowering of trade costs are critical for Ukraine, and that efforts should centre on addressing specific policy areas that negatively affect trade with both customs unions. Ukraine could propose the creation of a number of 'supply chain councils' organized around the major export sectors for Ukraine, the ECU countries as well as the EU. The councils would have a mandate to identify the most important sources of supply chain inefficiencies as well as actions to resolve them. Such an approach would help to rebuild trust between Ukraine and Russia after the cessation of hostilities and help to assure Russia that the DCFTA is not an anti-Russian agreement.
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