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Economic cooperation prospects of the Eastern Partnership: Polish-Ukrainian Cooperation

Posted Sept. 18, 2012, at 4:35 a.m.

The first week of autumn was marked by one of the major economic events in Central-East Europe: on September 4-6 22nd Economic Forum took place in the Polish small town Krynica. Political, financial and economic elite of European, North American and Asian countries have tried to find effective ways of economic improvement of the European Union, including cooperation intensification between the Central and Eastern Europe.

Considering geopolitical and economic changes, which have been occurring in the European Union and Eastern Europe today, the Economic forum in Krynica is considered as one of the important platforms for development of Eastern Partnership and, in particular, for new models of relations “EU-Ukraine”. Poland plays a special role in this dialogue as one of the basic strategic partners and main promoter of Ukrainian integration aspirations in EU.

Long-standing bilateral relations between Poland and Ukraine have been continuing due to not only strong historical and cultural ties but also to stable economic cooperation. Poland supports the integration efforts of Ukraine and promotes Ukrainian achievement of full membership in EU.

Among the European countries Poland is one of the largest trade and economic partners of Ukraine, and bilateral trade turnover of both countries takes the fifth place after Russia, Germany, China and Belarus. The Polish companies export polymeric materials, paper products, coppers, cars, mechanical and electric devices, and also energy carriers to Ukraine. The assortment of Ukrainian production to Poland is traditionally raw materials for iron and steel industry, ferrous metals, mechanical engineering production, wood etc.

Foreign trade strengthening between Poland and Ukraine is indicated by dynamics of the trade turnover. Trade volumes have made up $5.977.4 million in 2011. At the same time, Ukrainian export to Poland has made up $2.794.1 million. It’s by 56.3 % more than in 2010. Polish import volumes to Ukraine have increased by 14.1 %, and comprised $3.183.3million. The negative balance in foreign trade with Poland in 2011was $389.2 million. 2011 resulted in increase of services trade between Ukraine and Poland by 19.6 % compared to 2010 and made up $271.7million.

In the first quarter of 2012 the turnover of have increased foreign trade came to $1.364.3 million. In its turn the Polish import comprised $705.5 million and as compared to 2011 has increased by 11.6 %. The volume of Ukrainian export to Poland has made up $658.8 million and has increased by 5.6 % contrary to falling of total Ukrainian exports to European countries almost by 15 %.

One of the main parts of cooperation is bilateral investment partnership. Ukraine works hard on investment climate improvement and tax laws. “Ukraine is open for investors and offers them tax cuts, simplification of input and work on the Ukrainian market, therefore it’s very important for Ukraine as the nearest neighbor to estimate these initiative steps,” said representative of the Administration of Ukrainian President Mrs. Irina Akimova during the Economic Forum.

Today Polish production and services are widely presented on Ukrainian market. The enterprises and banks with the Polish capital have been working successfully here. There are building ceramics factory “Zersanit”, parquet factory “Berlinek”, furniture factory “New Style”, wrapping factory “Ken-Pak”, spares factory “Inter-Groklin”, metalworking factory “Polimeks-Mostostal”, bank “Credo”, “Plus-bank” etc. The mutual understanding memorandum has recently been signed between Polish “Bank Gospodarstwa Krajowego” and the State Export-Import Bank of Ukraine.

Ukrainian investors also take great interest in development of Polish economy. In particular, Ukrainian capital is widely presented in Poland: Warsaw Automobile Factory (investor – Avto-ZaZ), metallurgical complex “Guta Tchenstochova” (investor – Donbass Industrial Union Corp.), shipbuilding factory Stotchne Gdanske (investor – Donbass Industrial Union Corp), Guta poka (investor – Privat Group), lighting appliances factory Gelios (investor – Iskra).

On experts opinion Poland and Ukraine have huge non-realized potential in economic cooperation. There is mutual interest in developing of transport infrastructure, in particular, in increase of railway freight traffic and in feasible liberalization of two-way and transit automobile communication. Cooperation on aviation and sea transport is also underway. Countries actively cooperate in development of road sector.

Effective energy cooperation might become strategic not only for Poland and Ukraine, but also for the EU countries. The huge prospects may be opened by oil pipeline Odessa-Brody to Plotsk and Gdansk. Realization of this project would allow providing energy security not only to Poland and Ukraine, but also to other European states.

Poland and Ukraine have considerable potential in military-technical cooperation and state security and defence maintenance. In particular, the parties are considering possibilities of forming of the joint military division which would participate in peacekeeping operations.

Except development and deepening of economic cooperation Poland could share useful administrative-territorial reforms experience with Ukraine.

At Krynica Economic Forum Polish President Bronislaw Komorowski said that despite crisis Europe remains attractive to such countries as Ukraine, which seeks to belong to the world of united Europe. These aspirations were confirmed by the first Deputy Prime Minister of Ukraine Valeriy Khoroshkovsky: “The Association Agreement between EU and Ukraine should be a foundation stone of the European integration to the East. We should create Europe of different speeds, different integration levels, open and flexible one”, the Ukrainian politician declared.

Thus, Poland and Ukraine have all chances and possibilities for the further development and expansion of economic cooperation, both in bilateral relations and in the Eastern Partnership”.

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