Deep And Comprehensive Free Trade Area Research Articles

Impact of the Deep and Comprehensive Free Trade Zone on the Economic Development of the Republic of Moldova

The Republic of Moldova, being a state with a small economy, has considerably diversified its sales markets, focusing primarily on the European Union market, which currently absorbs more than half of its exports. The present study tries to highlight the benefits of the Association Agreement and the Deep and Comprehensive Free Trade Area (DCFTA) implementation, which contributes to increasing the competitiveness of domestic companies on European markets and the liberalization of trade in goods and services. In conclusion, some measures are highlighted that are necessary to be implemented by the Republic of Moldova, in order to ensure the economy reorientation towards export by diversifying both the geographical structure and products in particular, improving commercial policy regulations, product quality, attracting investments foreign direct, the elimination of corruption.

ECONOMIC INTEGRATION OF UKRAINE: CONTEXT OF THE RUSSIAN-UKRAINIAN WAR

Integration with the large market of the EU creates additional competitive advantages for Ukraine. The Association Agreement and the Deep and Comprehensive Free Trade Area (DCFTA), the status of the candidate country and international assistance, which aim to approximate Ukraine’s legislation to EU norms, have become the institutional instruments of such integration. Over the recent years, the European Union has become Ukraine’s main trade and investment partner. The basis of Ukrainian exports to the EU is formed mainly by crops and metallurgical products. The main items of Ukraine’s imports are supplies of machine-building equipment and fuels. In terms of grains and oil crops, Ukraine is the main supplier to the EU. Under the conditions of war, the foreign trade with the EU has proven itself to be robust in volume and, in contrast to other vectors of trade, diversified. This was facilitated by the elimination of a number of tariff and non-tariff restrictions on Ukrainian exports to the EU, as well as the realignment of the logistics infrastructure towards the West. The structure of Ukrainian exports to the EU has seen an increase in the role of a range of agricultural products, along with a sharp decline in the role of metals. On the other hand, the EU has become an important supplier of military products and fuels to Ukraine. Along with that, with the question of security unresolved, the insufficient investment attractiveness remains to be a problematic aspect for Ukraine.

Groups of products with improved market access & improved exports

Introduction. The results of Ukraine’s activi­ties within the framework of the Association Agreement between the EU and Ukraine, inclu­ding provisions on the Deep and Comprehensive Free Trade Area (DCFTA), improving market access means not only the reduction of tariffs, but also the reduction of non-tariff measures through alignment with EU rules. Problem. Competition between rules leads to convergence of standards in practice. However, the issue of continuation of national diversities is empirical. The aim of the study is to identify the rela­tionship between product groups with improved access and exports within the study of Euro­pean perspectives for the further development of Ukraine. Methods. The study uses general and special research methods. Results. It is substantiated that Ukrainian business can increase the productivity and effi­ciency of its activities by adopting EU standards by 13–30 %. It is established that a smaller share of imports in a particular country’s total imports would imply greater trade costs in that country for the exporting country, and vice versa. All products with HS4 codes which market share in EU is less than market share in the world are identified. Ineffective products within the scope of the DCFTA have been identified. In order to identify these products a special formula is pro­posed. An economic-mathematical approach for evaluating export growth in conditions of con­flict-free trade is proposed. Conclusions. Tariffs are not the only barrier to market entry in the EU. Some of the largest trade transaction costs have been seen to be a major barrier to export development which was addressed within the DCFTA. Further inves­tigation could be focus on assessing the compe­titiveness of products with improved access.

Evaluation of the results and analysis of the impact of the DCFTA with the EU on agricultural trade in Ukraine

Purpose. The purpose of the article is to evaluate the impact of the EU-Ukraine Deep and Comprehensive Free Trade Area (DCFTA) on bilateral trade in agri-food products and domestic food market of Ukraine during the first five years after the entry into force of this DCFTA.
 Methodology / approach. Analysis of the impact of DCFTA with EU on the agricultural trade is based on the cost-benefit approach. The results of the implementation of the DCFTA agreement are evaluated in terms of benefits and losses for the main stakeholders (players) in agricultural trade – Ukrainian agricultural exporters, domestic agri-food producers, consumers, and the government sector. Based on the methods of analyzing the structure of the sectoral market, a list of criteria for evaluating the results of the implementation of the Agreement was determined. A comparison method was used to evaluate the impact of the EU-Ukraine Association Agreement (hereinafter Agreement or AA) on agricultural trade and the domestic market of agri-food products of Ukraine. To study the DCFTA’s impact, the five-year period (2009–2013) before its implementation was compared with the five-year period after the entry into force of the DCFTA bilaterally (2016–2020). Since Ukraine lost control over part of its territories after the start of the Agreement’s implementation, relative indicators were used to assess the impact of the EU-Ukraine DCFTA on the domestic market of agri-food products. The research was conducted based on the data of the State Statistics Committee of Ukraine, UN Comtrade Trade Statistics Database, Eurostat Database.
 Results. The analysis demonstrates the undoubted benefits of DCFTA for Ukrainian exporters of agricultural goods: (1) after the implementation of the DCFTA, there was an increase in both Ukraine’s agricultural exports to the EU and imports of agricultural products from the EU to Ukraine, and the resulting positive balance in agricultural trade in 2020 was 5.5 times higher than in 2009. (2) the average growth rate of Ukraine’s agricultural exports to the EU during the first 5 years of the Agreement (10.3 %) exceeded the average growth rate of agricultural imports from the EU to Ukraine (7.2 %). (3) during 2016–2020, Ukraine’s exports of agricultural goods to the EU grew faster than agricultural exports to the rest of the World, which indicates the high effectiveness of bilateral liberalization of foreign trade regimes. (4) the DCFTA with the EU has not yet resulted in significantly reduce of the share of agricultural raw materials (or low value-added primary goods) in Ukraine’s exports to the EU. (5) the potential for exports of Ukrainian agricultural products to the EU, including those produced by small and medium-sized agrobusinesses, has not been fully realized due to the low levels of tariff rate quotas, high level of EU import duty rates applied to quantities imported from Ukraine outside tariff quotas and long duration and high costs of the certification procedures for the export to the EU. (6) during the first 5 years of DCFTA implementation, there was no significant expansion of imports of agri-food products to the domestic market of Ukraine. This happened not so much because of the high competitiveness of domestic producers, but because of the low purchasing power of the population. (7) the implementation of the Agreement did not have a significant downward impact on domestic prices for agri-food products in Ukraine. (8) the lowering of the tariff protection of the domestic market did not significantly influenced the domestic production of agri-food products which remained stable, except for the production of grape wines, which decreased during 2016–2020. (9) due to the implementation of the Agreement, the EU has increased its share in the import of agri-food products to Ukraine. However, for some commodity groups there was both absolute and relative decrease in imports. This happened due to competition from other importers, as well as due to import substitution processes.
 Originality / scientific novelty. The originality of the study is the specification (adaptation) of cost-benefit analysis methods to identify the DCFTA impact on the main stakeholders in agricultural trade of Ukraine with European Union – exporters, domestic producers, consumers, government sector. 
 Practical value / implications. The practical use of the study consists of identification of the positive and negative consequences of the DCFTA for Ukraine’s agricultural trade stakeholders, as well as factors of these consequences, that allows developing practical agricultural trade policy recommendations, including periodic time-to-time review of trade provisions of the Agreement.

Effectiveness of the deep and comprehensive Free Trade Area: A structural gravity model approach

Based on the gravity model of international trade, this article examines the ex-post impact of the Deep and Comprehensive Free Trade Area (DCFTA) on integration between Georgia, Moldova, and Ukraine with the European Union. We evaluate the welfare outcome of trade creation and trade diversion effects, compare the results of individual countries and identify differences between them. Additionally, the article evaluates the general effectiveness of the DCFTA as an instrument for trade integration. According to the structural gravity model estimations, as a result of the DCFTA, EU-Georgia trade increased by approximately 18%. In the case of EU-Moldova trade, the DCFTA impact is statistically less significant, around 9%. While DCFTA in Ukraine has a negligible effect on trade with European Union. The agreement brings welfare gains only in the case of Georgia. Generally, the average impact of the DCFTA on trade with the EU is positive but statistically insignificant for the region. The results are very different for each country.

EU-Ukraine “deep” trade agenda: the effectiveness and impact perspectives

The EU-Ukraine deep and comprehensive free trade area (DCFTA) is marked by an impressive scope of regulatory approximation and market integration. Nonetheless, the performance of the DCFTA often tends to be assessed through the sole prism of changes in the volume of trade between the parties. This paper seeks to complement such an approach by an in-depth investigation of EU-DCFTA’s performance from the effectiveness and impact perspectives. It finds that the EU-Ukraine “deep” trade agenda is marked by medium effectiveness, with the strongest concerns, attributed to corruption, weak rule of law and strong oligarchic influence. At the same time, the DCFTA had been a strong engine for trade-related reforms (e.g. countering technical barriers to trade; public procurement; competition and state aid) in Ukraine over the period from 2014 to 2019. Yet, the reforms’ tempo slowed down after the most recent presidential elections, with numerous changes pending in the domains of transport and infrastructure, financial sector reform and customs reforms. Nonetheless, the EU-Ukraine DCFTA is found to exert a considerable impact on the interplay of the regulatory spaces and influences in the regions and the role of the EU as a trade power.

Hindering Factors for exporting Georgian Agri-food Products to the EU Market (DCFTA)

In 2014 after signing the Association Agreement between the European Union and Georgia, a wide range of trade relations has been opened for the state of Georgia and was given the opportunity for the free trade. Chapter IV of the Agreement - "Trade and Trade-Related Issues", the agreement about Deep and Comprehensive Free Trade Area (DCFTA) includes the mechanism of economic integration with the EU and opens its internal market for Georgia. According to the agreement, if the required conditions are achieved, the world’s largest market will be opened for Georgia, which currently unites 28 countries and more than the 500 million customers. Utilizing this opportunity will lead increasing investment flows in the country, the emergence of new enterprises and export products, suppling of safe and harmless products to the customers. This will ultimately have a positive impact on the country's economic growth and the development, nevertheless it is still a distant prospect. In order to receive all the foreseen benefits of the Association Agreement, it became necessary to identify and eliminate problems in the number of areas. According to the agreement, food safety is recognized as a political priority of the European Union. Created program of legislative approximation with the EU includes the fulfillment of commitments and the deadlines, which is an ongoing process. In the years of 2015-2020, in accordance with the DCFTA agreement, 146 legal acts had been aligned with the EU legislation in the fields of food safety, veterinary and phytosanitary. Despite all these achievements, the major challenge for both the regulators and business operators still remains to be the enforcement and putting into effect the EU required standards. As the most products in the EU market are subject to harmonized rules, that protect the consumers, public health and the environment, it excludes the adoption of different national rules - the product made in Georgia must comply with the EU standards. That is why the Georgian business operators have to: introduce internationally recognized systems in the enterprise; adapt to the new regulatory environment; create a harmless, quality and competitive product; attract the European partners and be able to produce the required quantity, which may need to involve the different and modern production technologies. Therefore, it is essential to understand, that using the terms of the agreement do not completely depend on the smooth running of government agencies, as it largely depends on the personal progress of the business operators and the relevant associations. Keywords : Economic integration with Europe, food safety, international commitment, Association Agreement.

Inclusion in EU-Georgia Trade Relations: A Critical Institutionalist Analysis of the Georgian Domestic Advisory Group

This article advances a context-sensitive, critical approach to (1) conceptualizing, (2) assessing and (3) explaining participatory inclusiveness of multistakeholder mechanisms, and applies it to the empirical case of the Domestic Advisory Group (DAG) established in Georgia in the framework of the Deep and Comprehensive Free Trade Area (DCFTA) with the European Union (EU). Such multistakeholder mechanisms, promoted by the EU, are expected to democratize trade policymaking and refute criticism concerning the negative impact of trade on sustainable development. Our conceptual perspective highlights the importance of not only formal rules, but also micro-level power relations among stakeholders and their ties to macro-level power relations existing in a society, as well as the linkage between social and material sides of power. In our typology, ‘genuine’ multistakeholderism enables just consideration of diverse perspectives through high de jure and de facto horizontal and vertical inclusiveness. Yet our empirical analysis, based on extensive interviews and secondary sources, exemplifies difficulties in reaching ‘genuine’ inclusiveness. Situating the Georgian DAG in the broader societal context helps explain the low degree of inclusiveness we observe, and lack of significant progress in advancing a genuine multistakeholder debate as well as the trade and sustainable agenda in Georgia. Trade, Deep and Comprehensive Free Trade Agreement, sustainable development, multistakeholderism, civil society, participation, inclusiveness, Georgia, European Union, critical institutionalism

PROSPECTS FOR DEEPENING TRADE AND ECONOMIC RELATIONS BETWEEN GEORGIA AND THE EUROPEAN UNION

The association agreement aims at developing political and economic relations between European Union and Georgia. By association agreement Georgia has received a huge opportunity to become a competitive member of the European Union market and with Deep and Comprehensive Free Trade Area (DCFTA) preferences, introduce Georgian products at the world market with zero customs charge. DCFTA includes a wide range of issues concerning trade and considers gradual approximation of Georgian legislation to EU legislation. DCFTA implies liberalization of both goods and service trade. It gives Georgia a chance to receive all four EU freedoms from EU internal market: goods, service, capital and free movement of persons on EU territory (based on the liberalization of visa regime). And yet, what is DCFTA for Georgia: A special trade regime which, if used correctly, can significantly improve investment potential of Georgia and steadily develop the economy of the country; The preference which can ensure the growth of competitiveness of Georgian products and the demand for products produced in Georgia; The agreement which gives the Georgian side a very good chance to increase the volume of export with EU countries and significantly improve negative balance of trade; The regime which gives Georgian products a chance to enter EU with zero Customs charge and establish themselves at one of the largest world markets, which unites 500 million consumers and 21 million small and medium enterprises.

TOPICAL ASPECTS OF DCFTA IMPLEMENTATION IN THE JUDICIAL PROCEEDINGS

The Association Agreement between the European Union and Ukraine is a new format of relations aimed at creating a deep and comprehensive free trade area (DCFTA) between Ukraine and the EU with the gradual integration of Ukraine into the internal market of the European Union. Focusing on the experience of rule-making of the EU member states, it is necessary to define and implement the legal rules and principles of the national judiciary, taking into account the rules and principles of European law (Chornomaz, 2016). In accordance with the strategy of European integration of our country, the adaptation of Ukrainian legislation is to approximate it with the modern European legal system, which will ensure the development of the political, entrepreneurial, social, cultural activity of Ukrainian citizens, economic development of the state within the EU to facilitate the increase of standards of living of the population. The implementation of the provisions of European legislation provided by the economic part of the Association Agreement (AA) is extremely important in the context of reforms, as the provisions can and should serve as a basis for a new model of socio-economic development of Ukraine. The deepening of the processes of humanization and democratization of Ukrainian society, the gradual introduction of principles and rules of European law into the national judiciary through reforms in the field of justice, inter alia, have led to qualitative updating of criminal procedure legislation of Ukraine, in particular: use of differentiated approach to legal conflicts between persons who have committed criminal offences, which do not pose a great public danger, and victims; simplification and reduction of the procedure of criminal proceedings; ensuring procedural savings; reduction of the caseload; allowing the parties of the conflict to resolve issues of exemption from criminal liability in case of reconciliation between the offender and the victim independently, the appointment of the negotiated punishment and release from serving with probation, etc. Given the specifics of the approach to improving relations with neighbouring countries on a differentiated basis, the EU seeks to identify and base on existing positive sources of sustainability, as well as to monitor and respond to weaknesses with the appropriate set of methods and resources at its disposal. The purpose of the article is to study a theoretical and practical definition of challenges of adaptation of Ukrainian legislation to the legislation of the European Union, institutional and organizational mechanisms of DCFTA implementation in the field of justice and certain norms of the current criminal procedure legislation. Ukraine is undergoing the second phase of radical reform of government structures; it has been continuing for 15 years but, unlike other countries, it is much more difficult for Ukraine to get rid of the burden of past problems. Judicial reform is also underway and domestic legislation is being significantly changed, including the transformation of the judicial proceedings. The topical issue of the development of judicial reforms is an imperfection, and sometimes a contradiction of regulations, which negatively affects the process of realization of rights and responsibilities of all subjects of public relations, slows down the development of Ukraine as a state governed by the rule of law. However, the introduction of institutions of concluding agreements, simplified proceedings, probation, and later mediation, into the criminal procedure legislation of Ukraine indicates the readiness of our state to change the concept of criminal procedure in accordance with the European standards, which will improve the situation of all parties to criminal proceedings. However, they need further completion and improvement. We are convinced that the introduction of such institutions will contribute to the legal development of society to achieve the European standards of restorative justice, which will encourage the further introduction of the latter in the legislation of Ukraine, resolving criminal conflicts by reaching a compromise between parties in cases specified by law. One of the ways to solve this problem in Ukraine is to regulate the process of adoption of regulations by the subjects of rule-making and taking into account the provision that legality as an objective property of law, in general, is the necessary condition and the main principle of the rule-making process.

Ways to increase Ukraine’s export potential in the EU markets

The ways to develop and increase Ukraine’s export potential in the markets of the European Union (EU) are analyzed. The EU is Ukraine's main trading partner and destination for the vast majority of its exports. That is why the Government of Ukraine is focusing its efforts on the development and implementation of the best strategies and practices to increase Ukrainian exports to the EU. Despite significant share of exports to the EU, domestic businesses still experience difficulties and constraints accessing European markets. The current liberalization is dominated by the presence of two unfavorable regimes, namely the application of tariff quotas to a significant number of items and high technical barriers for Ukrainian access to the EU industrial market Based on the research of the economic part of the Association Agreement and the Deep and Comprehensive Free Trade Area (DCFTA), the existing structure of Ukraine’s exports to the EU, current access to European markets, existing state mechanisms to support Ukrainian exporters, the process of harmonization of domestic legislation with the requirements and rules of the EU, the following conclusions and recommendations are substantiated: the feasibility of launching and developing state programs to support Ukrainian producers, such as state co-financing of participation in international exhibitions, compensation for abandonment of geographical indications, effective and efficient lending system, targeted taxes and fees; expediency of export orientation on high-tech products with high added value and degree of processing; the importance of effective protection of domestic exporters, strengthening the mechanisms for monitoring the compliance of Ukrainian laws with the requirements of EU legislation taking into account the issue of climate change in the legislative process of Ukraine; simplification of the regulatory mechanism, elimination of long bureaucratic procedures.

Transnistria’s European Drive: A Means to What End?

ABSTRACT This paper explores the geopolitical role that a de facto state may play while operating in the context of patron-client relations and engagement without recognition framework. This is especially pronounced in Transnistria, which due to economic incentives offered by the EU through the Deep and Comprehensive Free Trade Area (DCFTA) may not fit well into the overall military-political or socio-cultural expectations of Transnistrians deemed to be part of the Russian dominion. The puzzle this paper seeks to unfold is twofold: first, it examines the motives and instruments that both EU and Russia exploit in their power projections towards Transnistria; second, it probes different avenues how de facto state authorities tackle possible tensions emerging from externally imposed choices, and how this all affects their role choice. It is not ruled out that regional linkages, also interests and needs that shape allegiances will lead to changes in geopolitical roles, and thus in the secessionist conflict dynamics.

PRIORITY FORMATS OF TRADE INTEGRATION OF COUNTRIES

Abstract. The study is devoted to the problem of trade integration of countries, in the context of globalization, the development of foreign trade is one of the main factors in the competitiveness of the national economy. Partnership with the EU is strategic for Ukraine. The aim of the study is to reveal the key characteristics and manifestations of the asymmetric development of trade integration of Ukraine and the EU and to identify priority areas of trade and economic cooperation. The object of the study is the process of trade integration of countries on the example of Ukraine with the EU. Methods, measures and tools of trade and economic cooperation between Ukraine and the EU in the context of integration are the subject of the study. The study is devoted to the characteristics of the partnership between Ukraine and the European Union in the context of the Deep and Comprehensive Free Trade Area (DCFTA), which came into force on September 1, 2017 and is part of the Association Agreement. The dynamics of indicators of Ukraine’s economy development and foreign trade sphere is quantitatively estimated. An analysis of relations between Ukraine and the EU was conducted and it was concluded that the EU is a priority partner of Ukraine, as on average 42% of Ukraine’s goods and services are exported to Europe in recent years. The existing asymmetries of trade and economic integration of Ukraine and the EU, which are manifested in technological disproportion, raw material exports from Ukraine and high-tech imports, a negative balance and the constant growth of the negative trade balance of Ukraine are pointed out. To assess the effectiveness of Ukraine’s trade policy measures in terms of the DCFTA, a gravity model was built, which allowed to state that bilateral trade between the EU and Ukraine is more elastic than the dynamics of economic growth of EU GDP and less elastic than the dynamics of Ukraine’s GDP. The study confirmed that the DCFTA between Ukraine and the EU has already significantly affected the growth of trade turnover between these countries. The main integration opportunities and threats of cooperation between Ukraine and the EU have been identified. The main tools of trade integration are highlighted and the priority goals of trade integration of countries are identified in our study of Ukraine and the EU. Keywords: trade integration, trade policy, DCFTA, FTA, globalization, international trade. Formulas: 2; fig.: 1; tabl.: 4; bibl.: 19.

Основні позитивні та негативні риси євроінтеграції України.

The paper is devoted to the analysis of the main advantages and negative aspects of Ukraine's European integration. It is concluded that the ideas of European and Euro-Atlantic integration of Ukraine has deep historical roots. Ukrainian – European relations have always been quite tight. And this is a natural phenomenon, because Ukraine is part of European civilization both territorially and with its historical and cultural values. At this time, Ukraine is also a member of more than one hundred international organizations. Of course, the European choice opens up new prospects for cooperation between Ukraine and developed countries, economic development, social and intellectual progress. Today, Ukraine is a priority partner for the European Union. The EU helps Ukraine to ensure a stable, prosperous and democratic future for its citizens and is unchanging in its support for Ukraine's independence, territorial integrity and sovereignty. The Association Agreement, including the Deep and Comprehensive Free Trade Area (DCFTA), signed in 2014, is a key instrument for rapprochement between Ukraine and the EU, as it strengthens political ties, strengthens economic relations and respects common values. Ukraine is implementing an ambitious program of reforms aimed at accelerating economic growth and raising the living standards of its citizens. For Ukraine, European integration is a way of modernizing the economy, attracting foreign investment and new technologies, increasing the competitiveness of domestic producers, and the opportunity to enter the single EU internal market. Of course, all of the above is fundamentally important for the Ukrainian state, but the European integration of the country is especially important in terms of its national security, which is the number one task for the country's sustainable development.

Integrating in a Rough Neighbourhood? The Part of Sustainable Development in the EU Economic Integration Efforts in the Post-Soviet Space: The Case of Moldova

Gunnar Wiegand and Evelina Schulz have labelled the European Union (EU)’s trade facilitation efforts in the post-Soviet space as an integration ‘in a rough neighbourhood’. With this in consideration, our article looks at the impact of the Deep and Comprehensive Free Trade Area (DCFTA) between the EU and Moldova on the development of the latter in a broader context of the EU’s Eastern Partnership (EaP) and European Neighborhood Policy (ENP). There is a clear link between the EaP/ ENP framework, within which the policy of extending EU legislation to the post-Soviet states is actively promoted, and the Association Agreement with Moldova. Our analysis of the implementation of Moldova’s economic integration into the EU market highlights not only positive but also several negative trends of this process. Namely, in the shorter term, Moldova’s economic, political and social benefits from the DCFTA are far from sustainable, as they are primarily associated with drastic legislative changes, as well as an increase in the export of raw materials and low-tech goods. In the long term, however, the DCFTA provisions bear the potential for the sustainable development of Moldova; but the effectiveness of their implementation depends primarily on solving systemic problems in the country. Against this background, we then offer an analysis of recent transnational disputes over one of the most crucial elements of Moldova’s sustainable development—namely, electricity. In particular, the so far latest ruling in the Energoalians 20 year-long row is essential both for the resolution of future transnational energy disputes under the Energy Charter Treaty (ECT) and for a better understanding of the EU’s attitude towards Moldova and its further European integration.

TRADE LIBERALIZATION: THEORY, PREDICTING THE CONSEQUENCES OF IMPLEMENTATION AND PRACTICAL REALITIES

TRADE LIBERALIZATION: THEORY, PREDICTING THE CONSEQUENCES OF IMPLEMENTATION AND PRACTICAL REALITIES

Supplying of Products (Herbs) on the EU Market, Imereti Agrozone, Export Opportunities

Imereti is located in the historical Colchis valley. With its teritory and potential of resourses it is one of the biggest regions in Georgia. The population of the nearby villages of the Rioni River in Imereti region have been following the cultivation of different crops. In the recent past, the greenhouse herbs production is remarkable. The products are distinguished by ecological cleanness and high quality. Within the DCFTA (Deep and Comprehensive Free Trade Area) and SME (Small and medium-sized enterprises ) projects it is important to ensure opportunity of certain products constant delivery to european countries. We have investigated this issue for this purpose. An anonimous research of ordinary people and detailed survey of entrepreneurs involved in exports, about land and other resources, financial issues and rediness of sociaty to start business,was carried out to reveal various problems in this field. Interesting results were received after making statistical analysis and relevant conclusions were made. Specifically, research finds that there are material and labor resources and sustainable climatic conditions for the continuous supply of herbs on the EU market in the Imereti Agrozone. In addition, the creation of green and greenhouse industries requires interested population to provide targeted state support for credit availability, quality seed materials and pest control and irrigation infrastructure. The vital direction is to find sustainable export markets and implement projects supporting the creation of agricultural cooperatives. Keywords: European integration, Export, Imereti agrozone, Financial material and labor resources, Continuous delivery, Standing market

POLITICAL AND ECONOMIC GOVERNANCE: A COMPARATIVE ANALYSIS OF EASTERN EUROPEAN COUNTRIES AND UKRAINE

The presented work is an attempt to compare the quality of governance in non-EU states in the Western Balkans and Eastern Europe with which the EU Association Agreements have been concluded, and Ukraine, including aspects of the impact of the DCFTA (Deep and Comprehensive Free Trade Areas). The most important issues are the interpretation of the results, the equality of countries, and the political consequences that may arise after the progression and the rapid pace of the member countries of the DCFTA towards the countries of the Balkan region. The identified countries seek full membership in the EU. Although the EU distinguishes between these countries, it recognizes “European prospects”, that is, membership in the EU, the commitments to adopt or approach EU laws and policies, made by both groups of countries, have much in common. This makes the comparison between the countries of the Balkan region and the member states of the DCFTA a sound and politically significant one. Such comparison is facilitated by numerous sources, qualitative assessments, and official ratings. Figuratively by analytical indicators, the countries can be divided into the first group of leading countries (Serbia and Montenegro) for which in February 2018 the European Commission proposed to consider 2025 as the possible date of accession to the EU. The second group (Albania and Macedonia), for which the date of accession negotiations is conditionally open in 2019. The third group includes Bosnia and Herzegovina, Kosovo, for which there are no dates, and Turkey, the negotiations with which are suspended. For comparison, if we take both political and economic indicators of Ukraine, it is approximately equal to the Balkan states of the second group and outstrips the states of the third group. The prospect of EU membership was recognized as the strongest external factor of internal political changes in the countries surrounding the EU. One of the most striking trends is the steady decline in the standards of political governance in all countries, for which the EU expands its membership perspective. One of the main manifestations of poor governance in the broader neighbourhood is the widespread corruption and impunity of officials. Weak rule of law and ineffective law enforcement bodies have become common practice in all different states and have allowed current officials to act impunity during their term of office. The identified results challenge the assumption dominating in political and scientific circles that a credible prospect of EU membership is steadily generating an internal environment conducive to democratic changes. The effectiveness of economic governance was assessed by the indicators of competitiveness of the national economy (Global Competitiveness Index, Corruption Perceptions Index, Human Development Index, Ease of Doing Business Index, Index of Economic Freedom, Index of Globalization, SEDA (Sustainable Economic Development Assessment)); GDP dynamics; the volume of foreign direct investment; economic activity of the population. In practice, the EU applies an increasing number of common economic policy instruments for the Balkans and member countries of the DCFTA, in spite of the political (or rhetorical) differentiation between countries, given the categorization of membership prospects. The convergence of the actual EU policy has taken place. The Association Agreements and the DCFTA have raised the level of political and economic governance in Georgia, Moldova, and Ukraine at the level of the Balkan countries while the expansion process for the Balkan countries has not advanced.

PROBLEMS AND PROSPECTS OF DEEPENING EU-UKRAINIAN RELATIONS

Three countries: Georgia, Moldova, and Ukraine have concluded European Union Association Agreements, under similar terms and conditions of European Partnership. Analytical review allowed determining that in their political integrative development, they have similar problems and ways to overcome them. They are distinguished by a relatively high level of democratic freedoms and political pluralism; however, none of them can be considered as a consolidated democracy, these countries have hybrid political regimes. Among the main obstacles occurring on the way of their integration processes, one can distinguish problems associated with ethical, regional, and cultural conflicts; specific features of the formation of constitutional systems; features of the formation of PR technologies of government and society; deep-rooted corruption and influence of oligarchs in party systems and, as a consequence, propensity to use non-constitutional means of political struggle and economic development. Despite these structural problems, favouring European values and norms demonstrated by societies of the three countries holds the promise of consolidating democratic institutions and overcoming problems. The purpose of the article is to determine problems and prospects of deepening relations of the EU with three countries: Ukraine, Moldova, and Georgia, and to substantiate theses stating that consistent and reinforced integration of the European Union in this region is crucial for further success and development of all actors of this process. Georgia, Moldova, and Ukraine do not compose a single region (both in a geographical and economic context); however, since 2014 they are developing according to the same scenarios. Their aspiration to integration has provoked problems in relations with Russia and intensified opposition to the policy of Europeanisation within the countries. In Ukraine, the most difficult and severe events took place: it passed through government overthrow, loss of territory, and military actions in Donbas caused by Russia, which continue to this day. For Moldova and Georgia, the choice of democratic imperatives also had grave consequences. In Georgia, they were identified as two long-term wars for the separation in Abkhazia and South Ossetia; ended with the defeat of central authorities and creation of two unrecognized states. Moldova has faced a similar problem in Transnistria in 1992. In all countries, Russian armed forces were important actors who played an important role in determining the results of these conflicts. According to the Democracy Index, Moldova is evaluated as “imperfect democracy”; Georgia – as “hybrid regime”; Ukraine has moved below, from the category of “imperfect democracy” to the lowest “hybrid regime”. Over the political pressure of Russia, the EU and Ukraine postpone the provisional application of the DCFTA (Deep and Comprehensive Free Trade Area) to January 1, 2019. There are marked positive consequences of Ukrainian export to the EU, which volume has increased by 30% in 2017. The structure of exports to the EU has shifted towards machines and equipment, fats and oils of vegetable or animal origin, ready-made meals, and products of animal origin. The EU share in Ukrainian exports and imports has also increased due to a significant reduction in trade with Russia. The application of the EU tariff quotas for agricultural production has increased over the 2014–2017 years because Ukrainian producers have gradually overcome the problems with food safety and weak demand for their production. European choice is an extremely important factor for continuous democratization of all these three countries. In spite of competition among European and Eurasian identities, each of them considers itself a European country. The choice to continue the path of association with Europe, made by these countries, despite obvious political risks (especially severe for Ukraine), is the best evidence of their real adherence to European development path.

HARMONIZATION OF ECONOMIC AND LEGAL MECHANISMS FOR DEEPENING EU-UKRAINIAN RELATIONS

The policy of Ukraine for the establishment and development of relations with the European Union began in 1993, was carried out all the years of Ukraine’s existence, and received intensive deepening with the beginning of the formation of an international treaty – the Association Agreement, which includes a list of legal, social, economic, and technical regulations, and Deep and Comprehensive Free Trade Area (DCFTA), in 2014 and its final signing in 2017. Political and economic objectives of the Agreement are of fundamental importance to the future of both Ukraine and the whole European region. The political goal is to implement European standards on the territory of Ukraine. This implies the introduction of fundamental European values, namely democracy, rule of law, respect for human rights and the standards of the European security system. The Agreement does not foresee membership in the European Union, however, does not exclude such an opportunity in the future. The economic goal is to help to modernize the Ukrainian economy by expanding trade volumes with the EU and other countries, as well as reforming economic regulation mechanisms in line with the best European practices. Subject to the improvement of the business climate, Ukraine will become attractive for foreign and domestic investment for further production for export to the EU and other markets of the world. Harmonization of standards and European regulations has become a much more important process than the fulfilment of strictly technical requirements and underlies the introduction of effective governance without corruption. In the process of harmonization of interaction, an adaptive institutional mechanism was formed (the highest level – annual Summits; the key coordinator is the Association Council, consisting of members of the Council of the European Union and members of the European Commission, and members of the Cabinet of Ministers of Ukraine; the level of operational coordination – the Association Parliamentary Committee, which includes members of the European Parliament, representatives of the Verkhovna Rada of Ukraine, and the Civil Society Platform; in order to coordinate processes on the territory of Ukraine, the Ukrainian government has introduced a few supervisory committees and commissions). The harmonization of the economic aspect of the mechanism has been determined in solving issues of openness of markets for duty-free import from Ukraine in April 2014, obtaining a visa-free regime with the EU, abolishing export-import tariffs, implementing European technical standards for food safety, phytosanitary norms, competition policy, service provision, and public procurement policy. The issues of further deepening of relations include a review of the terms for the introduction of regulations and legislative provisions before their actual implementation, stabilization of financial and economic processes in the country, and further development of democratic values and social institutions.