EU free trade zone could slow Ukraine’s GDP growth

A proposed free trade zone with the European Union could slow economic growth in Ukraine, the country’s deputy economics minister said in an interview published on Tuesday.

Ukraine hopes to clinch associate EU membership later this year, but Valery Muntiyan warned against the much-awaited free trade zone.

“Estimates by the ministry of the economic development suggest a drop in nearly all indices,” Muntiyan told the Kommersant-Ukraina daily. “GDP will slow by an estimated 0.23 percentage points in the first year of [the free trade zone].”

President Viktor Yanukovych last month ordered the government to speed up talks with the EU, which have been hampered by a row over Ukraine’s agricultural product export quotas.

Muntiyan said Russia had warned Ukraine of possible trouble ahead.

“Russia has said that import duties will rise, and there will be problems with quotas,” he said. “We can only see the tip of the iceberg, but there is also the large chunk underwater. It’s the work of intelligence, security issues, trade wars… Who needs another gas war?”

KIEV, April 5 (RIA Novosti)

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