The trading across borders indicator for 2018 remained at the same 119 position as for 2017, scoring 64.26 distance to frontier (DTF) points. It is the third year in line when Ukraine demonstrates minor changes in the indicator (Doing Business 2016 – 109, Doing Business 2017 – 119). The last major improvement was registered by the Doing Business 2016, when Ukraine improved its position in Trading Across Borders from 154 position of the 2015 report. Ukraine’s modest investment climate, post crisis condition of economy and political instability definitely influenced assessment of Ukraine as under this indicator and overall Doing Business 2018 rating. This may demonstrate that Ukraine is missing strategic objectives in the area of facilitating foreign trade.
Ukraine was assessed quite positive in terms of border compliance indices, both for import and export, showing that customs clearance, inspections and border checkpoint operations are handled more or less adequately.
Despite a number of major steps for improvement, for example, development of comprehensive export strategy, launch of National Single Window, drafting the legislation on Authorized Economic Operators, these steps have not been yet finalized and, as a result, had not positively impacted foreign trade, as intended. As a result, documentary compliance indices significantly exceed regional (Europe & Central Asia) average indicator. This evidences that Ukrainian operators still spend too much time and resources on proper maintenance of documents required for goods moved across border.
At the same time, Ukraine is building a solid base for future improvements. For example, Ukraine-Canada free trade agreement has started working since August 2017. The Deep and Comprehensive Free Trade Area between Ukraine and the EU has been fully applicable since September 2017. The said agreement stipulates approximation of the Ukrainian legislation with the acquis of the EU, which will further improve the Ukrainian regulatory requirements. Ukraine is expected to join Pan-Euro-Mediterranean preferential origin rules Convention next year and Free Trade Agreements with Turkey and Israel are currently being negotiated. Ukraine has ratified the Trade Facilitation Agreement, which implementation will all facilitate trade flows. All the above are indicators of Ukraine’s progress in legal, trade, regulatory domains and recognition of Ukraine as reliable trade partner.
As Ukrainian transformations are rather slow, they had not impacted Ukraine’s Doing Business rating for 2018. That is probably the core reason why Ukraine holds the same position with `trading across borders` indicator as a year ago. However, positive steps are taken by the government and coordination of efforts in this area may result in increasing Ukraine’s Doing Business ranking in the nearest future.
Eduard Zlydennyy
Co-Head of the Chamber Working Group on International Trade
EY
Anzhela Makhinova
Co-Head of the Chamber Working Group on International Trade
Sayenko Kharenko
