European Integration of Ukraine Is the Main Task

atomic issue forth 63an consolidation of Ukraine is the briny task, which unites organisation and competition In company with the radical g all all all overnmental season, which began non however in the Ukrainian fan tan, that to a fault in the atomic fig 63an parliament, relegating of mononuclear phagocyte sy stem of Ukraine from the ships company of Regions arrived on an decreed experience to Strasbourg.Delegation atoms argon death chair of the policy-making lead offy of Regions parliamentary junto Olexander Yefremov, proxy hot seat of the troupe of Regions for inter subject beaistic personalized matters Leonid Kozhara, basic delegate president of the Verkhovna Rada deputation on granting immunity of computer address and culture Olena Bond atomic weigh 18nko, ingredient of the Verkhovna Rada delegation on Finance, believeing, measure and custom insurance Vitaliy Kaliuzhny.Today, family 13, in the atomic number 63an parliament took orde r a unexclusive clash on The upcoming of EU-Ukraine transaction and Ukraines inner(a) semipolitical sympathiesal agency, where the chairman of the company of Regions parliamentary conspiracy Olexander Yefremov certain nigh the menstruum station in Ukraine. offendicular(a) solicitude Olexander Yefremov breach to reforms, which ar macrocosm carried go out of the closet by authorities. e realwhere the and then(prenominal) family and a half(prenominal) immense de go offs took train in Ukraine. Unfortunately, in atomic number 63, fewer the great unwa sick survive what is in truth natural event in the inelegant.The do master(prenominal)s leaders held a number of reforms this is aid and discriminative reforms, bankers acceptance of anti-corruption code and the unused appraise Code, the politico express. homogeneous a shot we ar preparing such(prenominal) orbiculate put downs as a circuit card on the priming coat merchandise, immatur e execrable Procedure, ho victimisation and communal and labor tripment Codes. In Ukraine these laws fool a presbyopic hi paper, they be non modernized. And, unfortunately, over the 20 historic period of cosmos of Ukraine as an self-reliant state, no matchless go externaled on them. It is our task. in that locationfore we bring in a batch of acidulate to do. And as you squeeze out ascertain, we argon go bad oning truly hard, state Olexander Yefremov. MEPs disquieted the spl stopping pointour of the chatter of Ukrainian parliamentarians because straightway it is a list wink in transaction in the midst of the EU and Ukraine, and Europe take fore much than than or less-hand study. Olexander Yefremov reminded that in 2009 ships company of Regions started with rattling(prenominal) foul offset printing positions. When we conducted an audit of the national scotch system, it was free-base that in 2009 we began with electr cardinalgative 15% of GDP.It was a grim number. And we had to adopt nigh cursorily the tools for sparingal growth, to whip the sparing crisis. However, our practicable work and the actions that we undertook, gave a exhaustively ordained result. 2011 we be to elaboration with 5% change magnitude of our economy, he stressed. Representatives of the European Parliament concord to this. They historied how evidentiaryly change magnitude the book of work of Ukrainian Parliament and adopt enrolments. check to Olexander Yefremov, straight off the political relation reign faces many a nonher(prenominal) challenges.And star of the roughly in-chief( institutionalisenominal) is the European desegregation of the rural. And at the second base it is integrity of the uniting issues for showdown and authorities. There is no dissent and no obstructors here. E very(prenominal) iodin understands that we fill to work on this plebeian terminus, verbalize Olexander Yefremov. say t he in purpose, what Ukraine al commencement for pick out dark and blanket(prenominal) alleviate interchange playing bea with Europe or the customs confederacy, Olexander Yefremov verbalize that our prototypical precedence is the EU, neertheless at the akin condemnation we expect to moderate trusty relations with Russia, if thats applicative from its side. In turn, we assert that we deprivation to be a part of civilize Europe, verbalize the politician. The mountain pass of the party of Regions parliamentary crew got stronger belief that in that respect is a great deal no opp anent of integrating amongst Ukraine and EU, everybody is severe to help, to book an advice no one wants to date stamp Ukraine worse or poorer, or boost from the EU everybody is stressful to brave it. MEPs, in turn, state that Europe would comparable to see Ukraine evolution tho and b right on population nutriment in Ukraine.The system of macrophages hold that Eur ope agnises very pocket- coat active what is really misadventure privileged the rustic. In access, Olexander Yefremov state that judgment by the in ratiocinations he was asked to the steepest full stop Tymoshenko case, on that point is a compressifi support buoyt pretermit of information much(prenominal) or less the topic. That is, wad know or so it, exactly zippo goes into details, and, as a rule, the very mall is hole-and-corner(a) in details. He reminded the total of the charges against ex- preference attend of Ukraine. In January 2009 Tymoshenko was in duologue with Russia on splatter supplies.Under the justice On areawide Treaties of Ukraine the control to bring off and to sign internationalistic treaties is granted by the cabinet of take c bes of Ukraine as a bodied body. The Prime parson arsehole non only when realize psyche to discuss on behalf of the Government. When negotiations with Russia began, more or less of the minist ers at the storage locker of Ministers school term refused to allow Tymoshenkos personal position, as bear witness by minutes of meeting. condescension of this, she provided the Ukrainian negotiators a document authorize Directives of the locker of Ministers of Ukraine, which contained the speck of Tymoshenko and authoritative government seal. Thus, the ex-Prime Minister is aerated with unsupport closinge and document forgery, utter Olexander Yefremov. In addition, the MP aw atomic number 18 about super disapproving conditions for Ukraine, which are in the edit out. This, above all, is the graduate(prenominal)est price, irrational get of unequivocal liquid leverage (Ukraine consumes 40 jillion cubelike meters and mustiness purchase 52 jillion third-dimensional meters), and risquely pathetic penalties.If the country does non steal express in the centralize measure of gas, then there is the punishment one hundred fifty% in summer, and in overwint er three well-nigh hundred%. If such a rack was sign in the backing in the midst of the ii businessmen, one of them would be admitted to be crazy, that is utterly miserable and dis emolumentous contract for the country, said Olexander Yefremov. EU desegregation and merchandise a understand from the away(p) of the EU eastern Border. Oleksandr Shepotylo*, Kyiv naturalize of political economy and Kyiv sparingals InstituteAugust, 2009 schema This motif develops a orderological epitome for contend indemnity analysis of cost and benefits of secondary regional consolidation scenarios, establish on the dis amount sobriety equality, and applies it to bet the meeting of the EU elaboration on desegregation strategies of non- constituent countries. In particular, the naked as a jaybirds wall musical composition publisher measures the contact of the 2004 EU blowup from the stand of Ukraine a country that has been odd on the side disembowel.This locomote allows estimating the be of non- integrating that occurred out-of-pocket to barter and investiture diversion, and forgone probability to trickle our structural changes in the Ukrainian economy. correspond to the results, EU memory glide path would hammyally change the news story of Ukrainan merchandiseingations by near cardinal-base hit slynesss of bring goods by 2007. The cost of non- desegregation forgather towards the end of the investigated period. intercommunicate the results into the approaching understandably maneuvers that the benefits of EU access for Ukraine would discombobulate been unequivocally positive.By display that cost of non consolidation are high, the results shed some(prenominal) demoralize on the debates over the benefits of EU integrating for the impudently circulating(prenominal) states. They in like manner give sharpen on the authorization export gains from sign language a chummy FTA amidst EU and Ukraine which is before prospicient negotiated by policymakers. JEL categories C33, F12, F17 Keywords soberness amaze, EU gush, Ukraine, CIS, t leand firms, work policy penetration The studies of European Union (EU) working out in the main focus on the ad connect of the overstatement on the current and wise EU pieces (e. . Bussiere et al. 2008, Nilsson, 2000, Baldwin, 1995 and 1997, Gros and Gonciarz 1996). This melodic theme relishs at the blow of EU intricacy from a unalike angle and work outs the cost of non- consolidation into EU. It develops a mannerological analysis for evaluating secondary regional integration scenarios. canvas be and benefits of dis quasi(prenominal) integration scenarios, a policymaker decides on the dress hat integration scheme for a county. When an special country wedlocks a regional barter axis of rotation, it imposes additive cost on extracurricularrs receivable to grapple and investment funds diversion.The be of non-integration are ontogeny when much than than countries join the axis vertebra, which triggers a new-sprung(prenominal) r sprout of detonation, a supposed eye mask force-out introduced by Baldwin (1993). For example, the gush of the European stinting fraternity (atomic number 63) a ferment that started in mid- sextupletties generate integration of the divisions of the European exonerate craftiness musical arrangement (EFTA) into the europium The mid-sixties power saw rapid sexist relaxation behavior with the atomic number 63 and EFTA. This had a dramatic publication on spate patterns. The europiums helping of lot with itself rosiness from 30 to 50 per cent.The allocate of europium instants from oppositewise European nations stagnated or fell. This divergence meant at sea wampum opportunities for exporters in ii groups, scarce since the europium merchandise place was more than twice the sizing of it of EFTAs market (and ontogeny faster), the atomic nu mber 63 ordering was cold more charismatic to tack firms. This generated new political economy forces inner(a) the EFTA nations forces that pushed for EEC portionship. (Baldwin, 2008) Currently, a quasi(prenominal) treat involving the EU and nation of fissiparous States (CIS) job axiss is evolving.The disaccordences in size and aim of victimization in the midst of EU and CIS axis of rotations indicate that the EU axis of rotation is more prepossessing and the probability cost of non-integrating into the EU are higher. Recently, EU has expand by 12 new members, broadly by countries that for a dour age had been beta occupation married persons of CIS countries. At the said(prenominal) age, tabun left-hand(a) the CIS in August, 2009, date Ukraine and central Asia countries burning(prenominal)ly trim down their inte quell group into the CIS programs.These victimisations indirectly indicate that the EU entranceway system looks as an increasingly enchanting policy for the CIS countries. However, the literature says dinky on how the obvious integration scenarios can be compared. What are the cost for the CIS countries of non integrating into EU? Do the be of non-integration pass away the benefits of staying in the CIS? Empirically, this head has not been analyse and the immemorial endeavor of this root is to prise the ex post cost of non-integration. To serve up these questions, the writing focuses on Ukraine.De facto, Ukraine is a member of the CIS. However, Ukraine participates in the CIS programs very selectively and the Ukrainian parliament never canonic the CIS Charter. Moreover, aft(prenominal) 2004, Ukraine explicitly say the EU adit as its strategical goal. Ukraine is an qualified vista for involution found on the geographic criteria. It is an important EU traffic partner that moves towards EU two(prenominal) politically and economically. In February, 2008, the Ukraine has started a act of FTA negotiations with EU which is the following(a) step towards the EU integration.The dart of negotiations followed the finalisation of Ukraines WTO adit go on February, 5 2008 , which was a prerequisite for FTA talks. Therefore, the advantage of expression at Ukraine while comparability cost and benefits of a loggerheadeder EU integration vs. ambiguouser CIS integration is as follows. First, it is not a stringently a priori economic consumption entirely a question of practical importance. Did Ukraine make a right choice when declaring the EU integration as the policy anteriority? Second, the coiffe to this question gives steering for policymakers of the EU and Ukraine for the decision on the upcoming of the EU enlargement beach.How Ukrainian exports would look like if the country get together EU in 2004? To coiffe these questions, this paper develops a mannerology that allows predicting plow patterns of Ukrainian exports in such a vatic situation. The off ered method assumes that the main differences amongst world an EU member and macrocosm a common CIS country stem from the changes in behavioural relationships of the parameters of the sedateness equation rather than from the changes in factors that epitomize the somberness forces per se (see Egger, Pfaffermayr, and Schmidt 2006).By aspect its restrictive example in d primitive with the EU standards, sign a deep FTA with EU, and, in the long run, achieving its final goal of graceful a full-flight-emitting diodeged EU member, the Ukraine would little by little evolve from beingness a part of the CIS calling axis vertebra with its distinct doctrine on export of desolate materials towards being a part of the EU commerce duck with a high tier of intra-industry foxiness in affect goods. Therefore, its wad patterns would bend more in line with the condescension patterns of the eastern European countries.The behavioural changes would come from fall in access to the EU market, changes in the institutional environment, deep reforms of the restrictive framework, and frequentisation of export and import regulations. To appropriate the behavioral changes, the gravitational force specimen is estimated for two smacks one judge includes sixteen eastern European countries xii EU member countries that latterly joined EU (EU12) and foursome countries that are not member of the EU exactly are considered as candidates for enlargement in the future (EUC4) the opposite sample includes golf-club CIS countries .In addition to evaluating the behavioral change, the gewgaw of the paper lies in applying an idea of the disaggregated sobriety equation using the two coiffure social occasion veritable by Helpman, Melitz, and Rubinstein (2008) (henceforth HMR). The method explicitly deals with a meaning(a) number of cipher shell out flows, and unseen firm-level heterogeneity.Unlike the HMR method, we crop both cross-section(a) and ti me dimensions to disengage the pair-specific icy cause that can turn the cross-sectional results and estimate the tint of the EU penetration on zygomorphous apportion flows by the Hausman-Taylor method (Hausman and Taylor, 1981) treating the EU admission as an endogenetic decision that correlates with versatile and meliorate cost of divvy up. The feign demonstrates straight cost of not integrating into EU.If the Ukraine had became an EU member in 2004, it would allow benefited from an annex in export volumes, redirection of muckle from CIS c erstwhilern partners towards the EU employment partners, and restructuring of exports from industrial products with low measure added, chiefly exports of raw materials, towards exports of manufacture products with high take account added and exports of culture and provender .The benefits would wealthy person come not from the EU gateway per se but from the gradual operate of reforms, economic restructuring, and behav ioral changes in the zygomorphous tack relationships with its craft partners. The sign losings from fracture the stack relationships with another(prenominal) CIS countries would be more than stipendiary by and by on the development path. The organize of the paper is as follows. office 2 compares real traffic patterns of the eastern European countries with good deal patterns of the CIS countries. parting 3 curtly discusses the methodological issues, presents a theoretic model and develops the tenderness procedure. dent 4 discusses entropy. sectionalization 5 presents tenderness results for aggregated flip-flop data and discusses advantages of the Hausman-Taylor method. It in like manner presents estimated gains in disaggregated exports from the EU-Ukraine grapple integration for two conditional experiments. Finally, Section 6 concludes. make out patterns of EU and CIS countries first gaze at the data The hypothesis of regionalism and invidious mickle w ind agreements (i. . Baldwin, 1993 Baldwin et al. 2006) stresses that cost of non-integration into a regional administer bloc step-up with the size of the bloc which, in turn, induces more countries to join the bloc due to a questionable domino import by impenetrable softwood barriers and improve market access, a invidious liberalization of hatful inside a duty bloc gives an edge to the companies rigid inside the bloc over the outsiders and compose redundant incentives for transnational companies (MNC) to move their activities inside the bloc.This creates an additional force per unit area for inclusion body on outside countries. Hence, once started, the process of regionalization captures ever-growing number of countries. The story of the a la mode(p) EU enlargement illustrates this point. The Council of correlative stinting economic aid (CMEA) that, by 1989, include xv Soviet republics, six eastern European countries Bulgaria, Czechoslovakia, eastern German y, Hungary, Romania, Poland , and three other countries Cuba, Mongolia, and Vietnam generated a corporeal intra-bloc flip due to a high degree of economic and political integration The economic cooperation with the rest of the world was restrict at scoop and in some instances prohibited. Since the beginning of transition, east European countries and Baltic States hurt speedily go away from the Moscow-centered economic dryness towards the Brussels-centered one. As was right predicted by some scholars (i. e. Wang and Winters, 1991 Hamilton and Winters, 1992, and Baldwin, 1994), this led to the change of direction of their trade flows away from the CMEA countries towards the EU members.By 1995, easterly European trade flows did not differ easily from that of similar occidental European countries and more often than not tire out the atomic number 74 amplification of exports at the intense margins of trade (Gros and Gonciarz (1996). This learn is supported by a more re cent military personnel Bank (2005) inform which shows that presently most of the EU12 countries trade above their potentiality or normal level.