Russian transit restrictions significantly affect Ukrainian economy

Doing business in Ukraine: Russian transit restrictions significantly affect Ukrainian economy

This article deals with estimated losses that Ukrainian economy may suffer due to imposition of restrictions on transit of Ukrainian goods through the territory of the Russian Federation.

Visit our website if you are interested in the #Ukrainian_economy or #doing_business in Ukraine.

Following introduction of additional measures on restriction of transit of Ukrainian goods through the territory of the Russian Federation, Ukraine will significantly lose in revenues from export of goods and trade with Central Asia countries, mainly Kazakhstan and Kyrgyzstan.

Thus, according to the Deputy Minister of Trade and Economic Development of Ukraine, due to the Russian sanctions Ukraine will lose up to USD 1 billion by the end of 2016. So far the export of Ukrainian-made goods to Russia has fallen by 36.2% in comparison with the same period in 2015. In addition, in January-May export of Ukrainian goods to Kazakhstan decreased by 46.2% or USD 136.4 million. Under estimation of the Ministry of Trade and Economic Development of Ukraine, restriction of Ukrainian transit to Kazakhstan and Kyrgyzstan will result in decrease of GDP by 0.3% or USD 0.4 billion.

Ukraine aims to launch a case against Russia in WTO in order to force the Russian Federation to cancel its transit restrictions. Additionally, some counter measures are discussed for implementation.

We note that earlier this year Russia changed its transportation rules for Ukrainian goods, which resulted in impossibility for Ukrainian goods to be delivered to Kazakhstan through the territory of Russia. The only way such delivery can be performed is via transportation of Ukrainian goods in sealed containers to Belarus first and then to Russia. This resulted in substantial decline in the amount of Ukrainian export to Middle Asia and Caucasus countries by approximately 50%. Ukraine also aims to strengthen its business and trade cooperation with Kazakhstan through implementation of a new trade route between Ukraine and Kazakhstan, which is designed for transportation of goods avoiding the territory of the Russian Federation.

Be the first to comment

Leave a Reply

Your email address will not be published.


*