Ukraine Is Only “Moderately Prepared” To Enter EU Single Market, According To European Commission Internal Document

One of the most beneficial aspects of Ukraine’s future membership of the European Union will be access to the EU Single Market, which allows free movement of goods, services, capital and citizens by removing technical, legal and bureaucratic barriers.

It allows citizens to trade and do business freely.

At present, Ukrainian industry is not realising its full potential.

In fact, in 2022, 33.8% of enterprises were unprofitable – up from 26.7% in the previous year.

Their total losses for the year increased 4 times – from UAH 232.8 billion to a staggering UAH 928.2 billion.

Clearly, the economic benefits for Ukraine, with its heavy industrial base and its huge agricultural sector with its arable land of 41 million hectares, of the country’s accession to the EU and the Single Market are almost incalculable.

The European Commission is optimistic about Ukraine’s integration into the EU Single Market.

“Ukraine is moderately prepared in the area of free movement of goods and is in between some and moderate preparation in the area of free movement of capital.” – Extract from European Commission staff working document, Nov. 8th, 2023.

Anybody doubting the advantages of being a part of the EU Single Market should consider that since Brexit – when the United Kingdom withdrew from the EU – the county’s GDP has fallen by 2-3%, and investment is around 10% lower than would otherwise have been expected.

These figures come from the Centre for Economic Policy Research (CEPR).

Ukraine’s IPR rules

Ukraine’s Law on Intellectual Property Rights (IPR) enforcement is broadly aligned with the EU’s acquis communautaire, the accumulated legislation, legal acts and court decisions that constitute the body of European Union law, the Commission working document points out.

(It is worth emphasising here that that EU law in it’s entirety must be transposed into Ukrainian law before accession can take place.)

Despite a suspension of IPR immediately following the outbreak of war, in November 2022 Ukraine established a new National Office for Intellectual Property and Innovation (UANIPIO) to provide stable support for IP-related matters during wartime.

However, IPR legal experts De Penning & De Penning point out that shortcomings remain in combating piracy and counterfeit products, as Ukraine remains one of the four main transit points for shipments into the EU of counterfeit products.

The competent authorities dealing with IPR enforcement include the National Police, the Bureau of Economic Security, the State Customs Service and the Office of Prosecutor General.

State Aid & Competition: still some way to go.

In the areas of state aid and competition further alignment with the legislative framework with the EU acquis is necessary, including modification of the law on State aid to cover under its scope services of general economic interest (SGEIs).

Ukraine’s current Law on State Aid does transpose some key articles of the EU’s Treaty on the Functioning of the European Union , the Commission has confirmed.

However, following the outbreak of war the law on State Aid was suspended under martial law.

Trade relations with the EU intensified after the entry into force of the Deep and Comprehensive Free Trade Agreement (DCFTA) in 2016.

Almost overnight import duties on most Ukrainian agricultural goods imported into the EU was reduced to zero.

With the application of autonomous trade measures since June 2022, the EU has unilaterally removed all outstanding tariffs under the DCFTA. Such measure was renewed for another year in May 2023.

The issues touched upon above represent a mere fraction of the challenges between the time of writing and Ukrainian accession.

However, with strong will on both sides those challenges can, and will, be overcome.

On December 12th the European Commission proposed a new instrument, the Ukraine Facility, to provide predictable financial support for Ukraine over the 2024-2027 period.

The Facility is intended to “cater both for short-term State and recovery needs and medium-term reconstruction and modernisation of Ukraine,” and is “designed as a flexible instrument adapted to the unprecedented challenges of supporting a country at war and ensuring predictability, transparency, and accountability of the funds.”

This article first appeared on https://questcomms.eu/