THE IMPACT OF THE FREE TRADE AGREEMENT WITH THE STATE OF ISRAEL ON THE DEVELOPMENT OF UKRAINE’S INTEGRATION POTENTIAL

Анотація

The paper focuses on the trade in goods between Ukraine and Israel in the context of the Free Trade Agreement signed between the Cabinet of Ministers of Ukraine and the Government of the State of Israel, as well as on the impact of the Agreement on the development of Ukraine’s integration potential. The data taken from the State Statistics Service of Ukraine allows to examine the commodity patterns of exports and imports, to analyze the dynamics of exports, imports, balance of trade and volumes of trade in goods between Ukraine and the State of Israel for 2016–2021. During 2016–2020 exports of goods from Ukraine exceed imports from Israel by 300–400 mln USD, while in 2021 – by 500 mln USD. The share of Ukraine's exports of goods to Israel in all merchandise exports of Ukraine has been slightly above 1%, while the share of imports from Israel has declined – from 0.5% in 2016 to 0.3% in 2021; the goods turnover has reached USD 956.0 mln USD. The analysis of commodity pattern of Ukraine's trade with the State of Israel demonstrates that the raw material nature of exports has been preserved: the share of сereals (commodity group 10) increased from 36% in 2016 to 37.9% in 2021; the share of ferrous metals (commodity group 72) decreased from 30.5% in 2016 to 23.4% in 2021. At the same time some improvements have been observed in the exports structure: the share of certain types of processing industries goods has slightly grown during the period under analysis, e.g. grain products (commodity group 19 – part of finished food industry products section); semi-finished goods from ferrous metals (commodity group 73); nuclear reactors, boilers, machines (commodity group 84); furniture (commodity group 94 – wood products, part of different industrial products section), etc. The Agreement resulted in Ukraine’s joining the Pan-Euro-Med (Regional Convention or protocols on the rules of origin of goods) which opens up “diagonal rules of origin” enabling more opportunities not only to offer the world raw materials, human capital, but also to be included in smart way in global value chains which increases the efficiency of the functioning of the national economy within the world economy based on the fragmentation of production and its subsequent digital cooperation using modern information and communication technologies; ensures a better division and cooperation of labor between producers of goods and services thus offering possibilities and creating conditions for more efficient fulfilment of Ukraine’s integration potential.

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