The Beginning of a Flourishing Trade
Ukraine formed part of the 15 republics of USSR. It became independent though in 1991. It occupies the Black Sea's northern shore and is bordered by other countries such as Czech Republic, Slovakia, Poland, Hungary and Romania. Its capital known as Kiev plays a vital role in its economy thus promoting the rules of trade in the entire nation.
Economically, USSR regarded Ukraine as the second among all republics in terms of importance. It ranked next to Russia which is one of the strongest nations in the world. Ukraine is considered as the largest producer of coal and embraces the largest mining area for ore. Steel, titanium and manganese were principally mined in the country. It is also founded on a vast land for agriculture.
Labor, education, agriculture and industry are the key aspects of the economy of Ukraine. With these data, it has been said that it could be one of the strongest European economy. There was some sort of decline seen up to the early part of the 1990's but it was reciprocated by a better standing in global economy which began in the year 2000. It had recorded economic growth at its highest in 2004 at 12.1 % and as of 2007 the development was seen at 7.2%.
The area is rich in natural resources with the ferrous metal industry as well as other industries for chemicals, steel pipes, coke, mineral fertilizers and sulfuric acid taking the lead. Its manufacturing scene is comprised of goods like metallurgical equipment, locomotives, airplanes, tractors and turbines. The prime crops are beet sugar, sunflower seeds and grain.
The country had always believed and depended upon financial investment on a large scale. This is very important especially with only 17 years as an independent nation. They have given all the right for foreigners to do business as well as purchase the existing companies which need financial support from people like them. But for some reasons, the proposal of the Ukraine government for direct foreign investment was not realized. This was due to corruption coupled with weak laws under constitutional governance.
Soviet Union's dissolution in 1991 had provided greater opportunities for the republics formed after its closure. Ukraine was recognized by the United States and in January of 1992, the latter improved its own Embassy in the capital city of Kiev. The prospering market economy played an important role in Ukraine's transition into a democratic country.
Major Exports and Imports Between the Two Nations
With the US's strong belief in the capabilities of Ukraine, they have started trading even right after the USSR's dissolution. The United State's acceptance of this formerly communist nation paved the way to a better stand on democracy. Trade was then enhanced and the supply of goods going to and coming from both nations was seen to comprise a well-balanced economic system.
The US Census Bureau in its 2008 report had recorded a total of $1.25 billion US exports to Ukraine. Its imports on the other hand were tracked at $1.50 billion. These statistics comprises the eight-month period ending August 2008. For the year 2007, the said agency had given the following economic census results for the trade between these two nations:
Trade Agreements Between the US and Ukraine
- Ukraine Exports to US. A total of $1.22 billion exports from Ukraine entered the boundaries of the United States. Of this amount, $537 million went to iron and steel mill products (semifinished). This was equivalent to 44.02% of the year's total. Other products on top of the charts were: fertilizers, pesticides and insecticides; unmanufactured steelmaking an ferroalloying materials; spacecraft, engines and parts except military; fuel oil; drilling and oil field equipment and platforms; nonfarm tractors and parts; apparel and household goods coming from cotton; iron and steel products except advanced manufactures; and railway transportation equipment. The last product amounted to $17.01 million which is 1.39% of the entire year's total.
- Ukraine Imports from US. The balance of trade between these two nations was seen in the total exports and imports. For Ukraine's imports from US, a total of $1.34 billion was recorded in 2007. Agricultural machinery and equipment was found on top of the list comprising 19.13% of the total with an amount of $256.35 million. Joining the entire list were: passenger cars, new and used; unmanufactured tobacco; meat, poultry and other products; metallurgical grade coal; fish and shellfish; materials handling equipment; other industrial machinery; civilian aircraft; and industrial engines. Industrial engines sold at $32.46 million which is 2.42% of 2007's total.
- Fastest-Growing US Exports to Ukraine. To prove the strong bonds between US and Ukraine, most of the prime commodities gained recognition for themselves in the sales arena. For US exports to Ukraine, aluminum and alumina tracked the highest percentage of 4,339% from 2006 which is equivalent to an amount of $6.12 million. Commendable products comprising the list were: metallurgical grade coal; other manufactured agricultural goods; glassware and chinaware; and other nonferrous metals. The last good had sales of $12.21 million which is 629% higher than those sold in 2006.
- Fastest-Growing US Imports from Ukraine. With the goods from Ukraine entering US, a lot were seen to have prospered from the year 2006 to 2007. Synthetic rubbers, wood cork, gums and resins topped the list at 4,453% increase or $4.85 million. Other products on top of the charts were: clocks, port, typewriters and other household goods; medicinal, dental and pharmaceutical preparations; unmanufactured leather and furs; and vegetables and preparations. The last product was sold at $4.73 million which is equivalent to an increase of 863% from 2006.
Since its inclusion as one of the comrades and trade partners of the US in 1992, Ukraine had sought a lot of benefits from the US. To strengthen their bond, the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) was made in the said year. Ukraine was the primary focus of the assistance and since then, around $3 billion had been invested by the US in the said country. This further promoted economic, political and security as well as health and humanitarian aid in Ukraine. To reinforce the rules of trade, the Ukraine Trade Relations Agreement was placed into force. Specifically, this pact concentrated on the following:
Disputes Between the Two Nations
- Most Favored Nation (MFN) Treatment. This means that all products whether imported or exported on both sides should be accorded with no conditions. The concept of free trade enters into this particular aspect. All financial undertakings shall be monitored especially on custom duties, charges, takes, levies, impositions and methods of payment. Rules pertaining to transport, distribution, purchase and storage of products in the domestic market were also emphasized.
- Market Access. Reciprocity was given emphasis on all goods and services going to and coming from the territorial jurisdictions of both nations. Equal opportunities for commercial concepts and marketing options were furthermore discussed. Products traded shall be sold within the bounds of the rules of the land where they are transported to at a price commensurate to all related expenses on delivery and with the time consideration as well.
Despite the support given by the US to Ukraine, it could not be avoided that some conflicts were seen along the way. This may have hindered their relationship to some effect. Primarily, the basic dispute was on the interest of public administration. Ukraine, being a young member of the world economy, has some conflicts in its government which have not been governed by the code of ethics. This may have taken apart the coming in of foreign investment from other countries.
Another essential conflict that needs to be resolved immediately is on the commercial disputes. Some judicial decisions were said to be undertaken by Ukraine especially that some big US companies entering their land was rendered into confusion of primary business laws and standards. To this end, monitoring of the achievement of primary goals was to be tracked by the US to see whether or not the Ukraine side is doing their own share.
What Lies Ahead on Their Trade
In order to resolve the very minor disputes that they have, representatives from both governments sat down and discussed things. They have instituted a plan which could further stabilize their relationship in international business. Furthermore, they took full responsibility for their actions and saw to it that vested interests are eliminated from the trade route.
The efforts are too extensive for both sides to meet in the end. Ukraine wants to pursue its dream of gaining cognizance in world economy, thus it complied with every requirement imposed by the United States. Still in the process of learning though, US had stood by Ukraine and sustained its faith in its economic capabilities. The questioning has to end where they have made forums and conferences effective enough to address matters. Legislations were intensified and global standards have interfered. With all these things, much is yet to be seen in the future of the US-Ukraine trade relations.