Ukraine offers the US a free trade agreement: what is known
20 May 12:44
President of Ukraine Volodymyr Zelenskyy has sent a letter to US President Donald Trump in which he proposed to conclude a free trade agreement between the two countries. This was announced by Deputy Minister of Economy and Trade Representative of Ukraine Taras Kachka, "Komersant Ukrainian" reports citing Interfax-Ukraine.
According to the trade representative, communication on such an agreement will be the next stage of cooperation with the United States in the economic sphere. He emphasized the importance of such an agreement for Ukraine, despite the fact that the United States is not our country’s largest trading partner. According to him, Ukraine seeks to conclude free trade agreements with all the countries of the Group of Seven.
“We are interested in free trade agreements with all G7 countries. We have one with the UK, one with Canada, one with the European Union. We also need the United States and Japan,”
– he emphasized.
Kachka explained that Ukrainian producers are increasingly focusing on richer and more developed markets with higher quality standards, which provides greater added value and profitability. The creation of the U.S.-Ukraine Reconstruction Investment Fund, in his opinion, creates the preconditions for such an agreement.
According to the trade representative, Ukrainian exports to the United States in 2024 increased by 67% to $869 million, accounting for 2.08% of total Ukrainian exports. At the same time, imports from the US amounted to $3.4 billion, or 4.95% of total imports to Ukraine.
Regarding the prospects for the abolition of the 10% duty on Ukrainian products imposed by the United States, Kachka noted that the negotiations are still at an early stage. A conversation with U.S. Trade Representative Ambassador Jamison Greer is scheduled for this week.
“The other thing is that we also need to understand … that the US tariffs applied by the US and the new approach to them is a kind of new reality,” he added,
– he added, emphasizing that Ukraine is only at the “starting position” in these negotiations.
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Why conclude free trade agreements
Afree trade agreement(FTA) is an international agreement between two or more countries that provides for the simplification or complete elimination of trade barriers in mutual trade in goods and services. The main purpose of such agreements is to create favorable conditions for exports and imports, reduce or eliminate customs duties, quotas, technical barriers and restrictions, which makes trade cheaper and more efficient for businesses.
Free trade agreements can cover not only goods, but also services, investment, intellectual property rights, competition rules, public procurement, and digital trade. They often also include provisions on environmental protection, labor standards, and dispute settlement mechanisms. Such agreements are mutually beneficial, as they allow countries to focus on producing goods and services in which they have a competitive advantage.
Historically significant free trade agreements
The first free trade agreements appeared in the 19th century. One of the most famous historical examples was the Cobden-Chevalier agreement signed between Great Britain and France in 1860. It provided for a mutual reduction of customs tariffs and was the impetus for the conclusion of similar agreements between other European countries. In the 20th century, an important step was taken with the creation of the General Agreement on Tariffs and Trade (GATT) in 1947, which launched the international system of multilateral trade rules and later evolved into the World Trade Organization (WTO).
In its current form, a large-scale free trade agreement was implemented in 1994 with the signing of the North American Free Trade Agreement ( NAFTA ) between the United States, Canada, and Mexico. It provided for the complete elimination of tariffs on most goods, investment liberalization, and protection of intellectual property rights. NAFTA became a model for many subsequent bilateral and regional agreements and was updated in 2020 as the USMCA. These historical examples have shaped the architecture of modern global trade.
Significance for Ukraine
For Ukraine, free trade agreements are a key tool for integration into the global economy. In particular, the Association Agreement with the European Union contains provisions on the establishment of a Deep and Comprehensive Free Trade Area (DCFTA), which gives Ukrainian producers access to one of the largest markets in the world. Similar agreements have also been concluded with Canada, the United Kingdom, Israel, and other countries.
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