Executive Summary
Ukraine has proceeded far in its postcommunist economic transformation. In recent years, its exports have surged soundly, and they are now driving the country's economic growth. Access to foreign export markets has become a key question for Ukraine's economic future. Trade policy has gained such importance for Ukraine's aspiration's for accelerated growth and reaching its Millenium Development Goals that it should be Ukraine's predominant economic policy and international policy priority. This is an attempt at a formulation of a strategy for foreign trade policy for Ukraine.
The main tenet of Ukraine's trade policy must be to gain early accession to the World Trade Organization (WTO). A realistic but ambitious target is 2004. That requires the Ukrainian government to concentrate single-mindedly on resolving all the outstanding issues. The primary focus should be to accelerate the composition and adoption of a final report on Ukraine's trade regime and adopt all the requisite legislation for entry into the WTO. Second, remaining bilateral issues need to be resolved to complete the seven remaining bilateral negotiations, notably with the US and Moldova. Third, Ukraine should formulate a clear policy on agricultural subsidies and reach agreement with its WTO partners. For Ukraine, swift entry into the WTO is far more important than the exact conditions of accession, because its membership of the WTO is the only plausible basis of its trade policy. The WTO should be seen as a universal tool for all trade policy rather than an end in itself.
As soon as Ukraine has joined the WTO, it should try to improve its market access to key markets by concluding free trade agreements with the other eleven Commonwealth of Independent States (CIS) countries, the European Union (EU), the US and other key countries.
Ukraine has concluded and ratified a free trade agreement with all the CIS countries. This could serve as a basis for its future trade relations with these states, but this free trade agreement should be based on WTO rules and standards. Ukraine has no reason to waste time on discussing a customs union with any CIS countries, because such an agreement cannot be implemented, and a customs regime designed for countries with very different economic structures will not be beneficial to Ukraine's economic interest. The idea of a currency union in the CIS appears absurd given the devastating failure of the recent currency union and the absence of any advantageous preconditions. Any coordination with CIS countries in Ukraine's accession to the WTO could only complicate and delay it for years. When both Russia and Ukraine have become members of the WTO, they should be able to resolve their many bilateral trade disputes more effectively. To Ukraine, Russia's current discrimination against it in gas pricing is unacceptable and reconcilable with a free trade regime. Russia's export tariffs on natural gas must be abolished or waived, and Russian Gazprom's price discrimination against Ukraine needs to be alleviated.
Ukraine is subject to extreme trade discrimination from the EU. It is not recognized as a market economy, it is not member of the WTO, and it has no free trade agreement with the EU, while its Partnership and Cooperation Agreement (PCA) with the EU has turned out to be almost empty. It suffers badly, having little trade with the EU and enjoying comparative advantages in products, whose importation the EU resists. Ukraine should focus on requesting a comprehensive free trade agreement with the EU rather than a complex and nebulous agreement on a Common European Economic Area. First, however, it must become a member of the WTO.
Ukraine has approximately the same problems on the US market as on the EU market, though the US is less important for its trade since it is more distant. Also with the US, Ukraine should aim at a comprehensive free trade agreement, which requires that it first become a member of the WTO.
Ukraine needs to persuade the EU and the US to declare Ukraine a market economy, which it actually is, with free prices, small subsidies, few trade quotas and low import tariffs. The status of a market economy is important for antidumping investigations. Non-market economies have few chances of winning antidumping cases, and as a consequence prohibitively high tariffs are slammed on them. Antidumping cases tend to focus on steel and chemicals, which account or half of Ukraine's exports. This procedure is independent of the WTO accession and bilateral trade negotiations. Both the US and the EU have already acknowledged Kazakhstan and Russia as market economies. The US steel lobby, however, holds back this status for Ukraine, arguing that its steel industry benefits from tax exemptions, but that is no longer the case. The EU complaint about an excessive role of the state in the Ukrainian economy, which is less tangible and thus harder to counter, but it does not appear a relevant objection.
Introduction
In recent years, Ukraine has passed most of the hurdles of postcommunist economic transformation. Macroeconomic stabilization was accomplished long long. Prices and trade are liberalized. Privatization has proceeded so that about two-thirds of GDP arises in the private sector. For the last three years, Ukraine has had a sound average economic growth of over 6 percent a year, and it is likely to stay around 6-8 percent a year for the foreseeable future.
A fast economic restructuring is taking place. Industries in which Ukraine appears to have comparative advantages have grown particularly fast: steel, food processing, agriculture, and light industry. Within each sub-industry a desirable consolidation of 3-5 leaders is apparent. Although a few oligarchic groups hold out, they are becoming more normal conglomerates, and a sizeable number of new large and medium-size corporations have emerged. While corruption and repression remain problems, business surveys undertaken by the European Bank for the Reconstruction and Development (EBRD) and the World Bank in 1999 and 2002 suggest great improvements. Ukraine's transition to a market economy has succeeded.
In this situation, foreign trade attracts new attention for many reasons. First, with an official GDP at current exchange rates of about $40 billion, the Ukrainian economy is rather limited, and access to export markets is critical for future economic growth. In recent years, Ukrainian exports have expanded fast by slightly over 10 percent a year and are driving economic growth, but clearly much more can and should be accomplished. The old adage "trade rather than aid" describes what Ukraine needs now.
Second, the Ukrainian economy is very open with exports corresponding to about half of GDP, and exports have increased at over ten percent a year for the last three years. Exports comprise the growth engine in the Ukrainian economy.
Third, while the domestic market in Ukraine appears to work reasonably well, regional distortions in foreign trade are all too apparent. The most recent statistics for 2002 demonstrate that as little as 19 percent of Ukraine's exports went to the European Union (EU). According to the gravity model, which assesses how much countries should trade with one another, given the size of their economies and the distance between them, it should have been about 60 percent. Meanwhile, the share of Ukrainian exports going to Russia has fallen steadily to only 17 percent last year. Instead, Ukraine is increasingly exporting to all kinds of new distant Third World markets in Asia and the Far East, notably China, and the Middle East, which are more open. It is more important that exports grow than where they go, but this is not a normal development. With little doubt, this represents trade distortion, and Ukraine would benefit if it were able to export more to big markets in its neighborhood. Although Ukraine is a very open economy, agriculture is considered to be 93 percent self-sufficient, suggesting substantial sectoral distortions as well.
Fourth, Ukraine suffers from a predominance of so-called sensitive products in its exports, that is, goods that are particularly exposed to protectionist measures by other countries. They account for about three-quarters of Ukraine's total exports. Steel comprises 40 percent of Ukraine's exports, while each of the three sensitive commodity groups, agricultural goods, chemicals and textiles, account for over 10 percent. According to the WTO, Ukraine came in the 10th place in the world in terms of suffering from actual antidumping measures from January 1995 to June 2002, with no less than 37 antidumping measures concluded by various countries.
Fifth, Ukraine is now facing critical changes in its foreign trade agreements. Its negotiations about accession to the World Trade Organization (WTO) are approaching their final stage. The EU is suggesting that its Partnership and Cooperation Agreement (PCA) with Ukraine should be replaced with an agreement on a Common European Economic Area (EEA). The Presidents of Russia, Ukraine, Kazakhstan and Belarus just signed a declaration of their intention to negotiate a free trade zone. Thus, Ukraine is facing monumental decisions on its foreign trade relations in all directions.
Yet, sixth, although Ukraine is facing so many important problems and decisions in foreign trade, trade issues have been all but ignored in the country until recently. The preoccupation with getting the domestic market economic reforms has been so great. In the mid-1990s, Ukrainians had a tendency to blame the outside world for their hardships. Now, on the contrary, Ukrainians tend to blame themselves for whatever problems they encounter. While an admirably humble attitude, it does not necessarily reflect the truth.
This paper draws on continuous study of the postcommunist Ukrainian economy and reading of relevant literature. Its main inspiration, however, is meetings and conversations with senior representatives for the Ukrainian government, business, Ukrainian non-governmental organizations, academics, international organizations, foreign embassies, and foreign enterprises during a mission to Ukraine March 10-21. Its main intentions are twofold: to assess the critical foreign trade problems and to suggest a foreign trade policy strategy for the Ukrainian government. As agriculture tends to be of particular importance in all trade policy, this study lends special focus to the agricultural sector. The purpose is not to be comprehensive but to concentrate on key issues.
There are always many barriers to trade. This paper aims at focusing on the most important issues. First, everybody mentions the problem for exporters to obtain a value-added tax refund. Another query is what the Ukrainian economy looks like at enterprise level, but it appears a rather normal market economy. Then, the three big trade issues come, trade relations with the EU, trade with Russia and WTO accession. The EU should be Ukraine's main export market, but its imports from Ukraine remain surprisingly low, while Ukrainian exports to Russia are swiftly dwindling. WTO accession appears to be the key to Ukraine's trade policy. Agricultural concerns are a topic on their own, but they appear to be less severe than widely presumed. The last section is an attempt to formulate a foreign policy strategy for Ukraine.
This study is based on talks with a large number of people, including First Deputy Prime Minister and Minister of Finance Nikolai Azarov, Deputy Prime Minister for Agriculture Ivan Kirillov, Minister of Economy Valery Khoroshkovsky, Chairman of the National Bank Serhyi Tyhypko, presidential advisors Anatoly Halchynski, Vasyl Rohovyi and Ihor Yushko, former Deputy Prime Minister for Agriculture Leonid Kozakhsenko (now President of the Ukrainian Agrarian Confederation), State Secretary Olexander Chalyi, former State Secretary Andrei Goncharuk, parliamentarians Viktor Pinchuk, Viktor Yushchenko, Yulia Timoshenko, Olexander Moroz, Viktor Pynzenyk, Yuri Yekhanurov, Oleh Rybachuk, Boris Tarasiuk, and Ivan Tomych, Ukrainian businessmen Gennady Bogoliubov, Privatbank, Alexander Kirichko, InterPipe, Agrosoiuz, Carl and Lolo Sturen, Chumak, Nikolai Kompanets, W.J. Grain, Serhyi Cherchenko, ZAT Remburse, six private farmers, Fredrik Svinhufvud, Tetra Pak, US Ambassador Carlos Pascual, EU Ambassador Norbert Jousten, several European Ambassadors, the Japanese Ambassador, Roger Lawrence, Resident Trade Expert on WTO Accession at the Ministry of Economy and European Integration, Lorenzo Figliuoli, IMF, Alexander Kaliberda, World Bank, Christopher Crowley, USAID, Ebbe Johnson, IFC, the deputy governors for agriculture in Kherson and Dnepropetrovsk, and many others. I spoke on Ukraine's trade policy at seminars at the Agrarian Policy Forum at the UNDP, repeatedly with European diplomats, with students and academics at the Economic Education an Research Consortium at the Kyiv-Mohyla Academy, with a broad Ukrainian elite at the National Institute of Strategic Research, with businesmmen at the European Business Association, and I concluded with a press conference at the UNDP, and I gave a number of interviews to journalists. I also visited Anatoliy Grystenko and Anatolyi Rachok, the Razumkov Center, the German-Ukrainian Institute for Economic Research and Policy, and the CASE Ukraine Foundation (see attached program).
I want to thank the UNDP Office in Kyiv, and its staff who made this mission possible, UN Resident Coordinator Douglas Gardner, his Deputy Manoj Basnyat and Andrey Pogrebniak. I was accompanied much of the time by Olexander Shevtsov, Head of the Secretariat of the Government Agrarian Policy Coordination Council, and Tamara Zykova also from the Secretariat, and the program was organized by Liudmila Shovkoplias at the UNDP.
Problems with Value-Added Tax Refunds for Exporters
A dominant problem, mentioned by virtually all Ukrainian and foreign exporters, is to get value-added tax (VAT) refunds after export. By law, exporters should get the 20 percent VAT in their exports back from the state, but hardly anybody does. Thus, the VAT functions as a 20 percent penalty tax on exports, which is impermissible. The reasons for this problem are many, but the main cause appears to be that Ukrainian officials do not give enterprises money without commission. This raises a serious query whether VAT can function within the foreseeable future in Ukraine.
The IMF has long been engaged in sorting the problem with VAT refunds out. The issues are many, and several have been resolved, but still everybody complains, and no fundamental change is apparent. Originally, one problem was that one authority received VAT payments, while another was supposed to pay refunds. This problem has been mitigated, though not fully resolved. Another problem is that the government tends to budget too little money for VAT refunds, or that VAT refunds are subject to sequestering. Many see this as key, but it appears rather a symptom than the cause. A third problem is widespread exemptions from VAT. Although it is illegal, many who did not pay VAT in the first place anyhow claim refunds. Ukraine has twenty free economic zones, which deprive the state of VAT revenues, while they seem to do little to stimulate the economy. Similarly, agriculture and much of the energy sector is exempt from VAT. The malfunctioning free economic zones should preferably be phased out as a part of the preceding tax reform. However, if agriculture became subject to VAT, the tax inspectors would most likely devastate the current agricultural revival with their bureaucratic power, and energy is politically very difficult to handle.
The VAT system remains patently inconsistent, so full of loopholes that it is more akin to a Swiss cheese than a comprehensive system. Yet, none of these problems appear central. Sitting down talking to many exporters, all recognize the problems with VAT refunds, from which even Ukraine's biggest businessmen suffer, but three different answers are apparent. Some exporters complain that they receive VAT refunds too late, after three-six months, imposing extra credit costs. Another group never receives VAT refunds, meaning that VAT amounts to a 20 percent tax on their exports. A third group of export producers sells their goods to an intermediary that cashes the VAT refund for a fee.
This problem appears to be profoundly systemic, because all the twelve CIS countries suffer from it. The intended automatic VAT refunds are simply not socially accepted. The Ukrainian state, as other CIS states, has no practice of giving substantial amounts of money to enterprises without being paid commission. For that reason, enterprise subsidies are always connected with corruption in these states and have therefore been minimized. It appears utopian to believe that the Ukrainian state would accept to disburse large amounts of money regularly to enterprises in VAT refunds. Worse, the handling of VAT refunds seems a major source of corrupt revenues of the government administration. As a rule, VAT appears only to be refunded for bribes at a going rate of one-fifth of the VAT refund, that is, a bribe tax on exports of 4 percent, amounting to a possible total of about $800 million a year. To this should be added an interest cost, which is at least as large, given that a refund delay of four months appears standard. Thus, legal exporters pay an export tax of 20 percent and bribing exporters pay an export tax of 8-10 percent. This is a substantial distortion in favor of traders with more liberal conscience.
One big exporter solved his problem with VAT refunds for exports through an alternative legal scheme. He imported raw materials with VAT included, but these imports cost about ten percent more than the same inputs cost on the market in Ukraine, so the VAT refund still cost him ten percent extra, while it also prompted him to boost unjustified imports.
VAT has now been tried for over a decade in twelve CIS states, and refunds for exporters do not function in any single state. It is supposed to enhance transparency by offering an incentive to everybody to ask for legal receipts with VAT included. However, if the final payer needs to pay a bribe to acquire a VAT refund, VAT would be corrupting rather than legalizing. A decade in twelve countries with similar preconditions appears sufficient time to suggest a conclusion. To believe that VAT can function in a CIS state is no longer reasonable, although it works in Central-Eastern Europe, including the Baltics. It might help a bit if the VAT were lowered, as the government now suggests, to 15 percent, though that would only reduce the potential bribe tax from $800 million to $600 million, which is hardly sufficient to bring about a systemic breakthrough. A lower VAT and a reduction of the loopholes may be tried, but a more reasonable decision appears to be to abolish the VAT. To some extent, it could be replaced by an ordinary retail sales tax, which has the disadvantage that it is in theory more distortionary than a VAT, but that is hardly true in the CIS countries. A retail sales tax can hardly be made higher than 10 percent for that reason, but it has the advantage of not being applied to exports, which would level the playing field between honest and dishonest exporters.
A Look at the Enterprise Level
In economic development, an industry typically develops first within a country, expanding its share of the domestic market at the expense of foreign producers, thanks to raising quality. As competition increases, a handful of leading enterprises come to dominate and they start exporting to the most accessible markets, with exports being their engine of growth. Some of the leading exporters are often foreign-owned.
By and large, this development is apparent in Ukraine, but much debris of the Soviet economy remains and the speed could be faster. Immediately after communism, Ukraine had both too many and too bad enterprises in most industries. In a large number of industries, a consolidation to three-five sophisticated and mutually competitive enterprises has now occurred, providing a basis for competitive economic development. The leaders in each industry are expanding fast. Having taken over the domestic market, they are reaching out to foreign markets. Domestic trade barriers and transportation do not appear serious impediments, though people complain about excessive monopolistic railway tariffs.
Foreign direct investment rose to a new high of about 2 percent of GDP in 2002, and further growth is likely, though this is only one third of the East-Central European level. The standard complaint is Ukraine's poor investment climate, but another reason for foreigners not to invest in Ukraine is the country's limited market access, notably to the EU. Foreign investors often export to their home markets, but strikingly few European businessmen do that from Ukraine. They are few in Ukraine, while the barriers to export to the EU appear insurmountable to many. Meanwhile, incentives are slight to develop the sophistication of production. The problem of foreign direct investment and investment climate appears a chicken-egg question. If foreign investment and exports increase, they will require a better investment climate, but without market access, neither may occur.
Oddly, in spite of all the trade barriers they are facing, few Ukrainian businessmen seem to think about trade policy. They seem to perceive a glass wall in the West that they do not even think of breaking. Rather than dealing with trade policy, Ukrainian businessmen seek new markets. For instance, the steel industry is selling to China after other markets have been closed. Only Interpipe, Ukraine's dominant producer of steel pipes, appears to have a full grasp of international trade policy.
Trade Relations with the EU
Since 1996, Ukraine has repeatedly stated that it wants to become a member of the European Union at the highest official level. The EU has however cold-shouldered them, although Article 49 of the Treaty of the European Union stipulates that any European state may apply to become a member of the European Union. Many European politicians and EU commissioners have publicly ruled out Ukrainian membership of the EU, but formally the question remains open. A broad Ukrainian opinion favors the country's "European choice," though its implications are usually left open.
The institutional cooperation between the European Union and Ukraine has been rudimentary. The EU offered Partnership and Cooperation Agreements (PCA) to the CIS countries, which were little but a codification of WTO principles for non-WTO members. They do not offer any trade concessions beyond what the EU accords to its WTO partners, while the EU has concluded free trade agreement with many other countries. Ukraine has been treated as one CIS country among many. The Ukrainian PCA was concluded in 1994, but it did not come into force until 1997. It is valid for ten years and can be prolonged. Although it is comprehensive, covering political dialogue, trade in goods and services, economic, environmental, scientific, cultural and legal matters, it contains little of substance. The EU's only subsequent trade policy advance to Ukraine is its conclusion of a textile agreement that eliminated its import quota system.
The contrast between the development of exports to the EU from the ten post-communist EU candidate members in Central-Eastern Europe (CEE) and the CIS countries is huge. Barely half of the exports from the former went to the EU in 1989, rising to 67 percent in 2000. By contrast, 33 percent of Soviet exports went to the EU in 1989, but by 2000 that share had fallen slightly to 31 percent, according to IMF statistics. With exports to the EU of only 16 percent of its total exports in 2000, Ukraine was especially disadvantaged in spite of its vicinity to the EU. Given economic geography - Ukraine's location, transportation routes and the relative size of adjacent economies - the EU should be Ukraine's all-dominant export market buying 60 percent of its exports. Through regression analysis, Peter Christoffersen and Peter Doyle have established that the growth of potential export markets has been one of the most important determinants of growth in the transition countries.
One reason for the disparity in EU trade between the CEE and the CIS countries has been slower economic reforms in the CIS countries, but another reason has been diverse EU trade regulations. The EU has developed an elaborate hierarchy of trade treaties, ranging from simple trading partner to full member-state. As countries on the way to be full members, the CEE countries are close to the top of this hierarchy, while the CIS countries are at the bottom. The EU offered favorable Europe Agreements to the CEE early on, which committed all parties to eliminate tariff and non-tariff barriers on industrial products by the end of a ten-year period, which ended in 2001 or 2002. They were asymmetric to the benefit of CEE. Agricultural products are subject to preferential treatment under tariff quotas. On January 1, 1998, the EU lifted quantitative restrictions on imports of textiles and clothes from CEE.
The CEE countries are considered market economies by the EU (and the US), which means that an antidumping investigation is based on their own prices. The CIS countries, on the contrary, have been labeled "economies in transition" by the EU, which signifies that they are treated as state-trading countries and an antidumping investigation is based on a hypothetical country's (much higher) prices. Recently, Russia and Kazakhstan have been recognized as market economies of the EU and the US, and Ukraine should be able to make that grade very soon. The last EU objection is that the state plays too great a role in the Ukrainian economy, while the US last year rejected Ukraine as a market economy because of tax benefits for the steel industry, which have since been abolished.
Unlike the Central European economies, the major CIS countries are not members of the WTO. To date, four small CIS countries have become members of the WTO, the Kyrgyz Republic, Georgia, Moldova and Armenia, while all the others are at various stages of their accession.
Altogether, there is a world of difference in EU treatment of the CEE and CIS countries, respectively. CEE is about to become EU members, while the CIS countries have no associate status, no customs union or free trade arrangement. Largely, they are not even members of the WTO or recognized as market economies by the EU. Their trade status is reminiscent of "open season," and the US offers similar treatment.
These differences in status are reflected quite consistently in trade treatment and their total effect is significant. Even before their entry into the EU, the CEE countries get 80 percent of lines duty free to compare with, while 54 percent of lines for the CIS countries as GSP beneficiaries. GSP (Generalized System of Preferences) are trade benefits designed for developing countries, but they are not very beneficial for the CIS countries. For very sensitive goods - textiles, metals and many agricultural goods, most-favored nation (MFN) duty rates are reduced by only 15 percent, and for sensitive goods - chemicals, many agricultural goods, footwear, plastics, rubber, leather goods, wood, wood products, paper, glass copper, etc. - MFN tariffs are reduced by 30 percent. Only non-sensitive goods, which are not very significant in Ukraine's export, are duty-free. Moreover, the GSP regime suffers from many weaknesses. The supposed beneficiaries do not conclude any contract and therefore have no recourse to any dispute settlement conflict. The rules of origin are onerous, while special simplified agreements have been reached with CEE. GSP tariff reductions are less than those the EU accession countries get. Besides, Ukraine is so developed that it can easily be deprived of GSP because of too high economic development. Strikingly, nobody even talks about GSP in Ukraine.
Patrick Messerlin assessed EU Protection by industry in 1999. He put the level of overall protection for the whole of the EU economy at almost 12 percent. EU protection however varies by commodity, with rates of overall protection exhibiting wide differences by sector. Messerlin studied ordinary customs tariffs, major border non-tariff barriers (quantitative restrictions and antidumping measures), while he has ignored all the non-border barriers, that is, an array of norms and standards.
The simple average of all existing EU tariffs on goods was 7 percent in 1999. They are not very high, but protection is much higher for goods that Ukraine would like to export. Besides, if other costs in the CIS countries are similar to CEE countries, even small barriers can rule out imports from the CIS countries. The CIS countries generally have a cost advantage compared to the CEE countries through lower wages, but this is counteracted by higher transportation and other costs.
EU trade policy is more restrictive than simple average tariffs indicate, especially for the sensitive products, agriculture, steel, textiles, clothes and chemicals. Non-tariff barriers include variable levies in agriculture, voluntary export restraints in industrial sectors (notably in textiles and clothing), quotas on imports from centrally planned economies (to which the EU counts Ukraine) and antidumping measures. The peaks of overall protection are very high. The maximum tariffs exceed prohibitive 200 percent for certain agricultural goods. Also these EU measures are persistently milder for CEE countries than CIS countries. For instance, the number of antidumping cases that the EU instigated against the CEE countries from 1990-99 was 42, admittedly almost equal to the 41 initiated against the CIS countries, but the duties imposed against the CIS countries were about twice as high as those levied on the CEE countries (Messerlin 2001, p. 353).
EU agriculture is particularly well protected. The simple average tariff is estimated at 17.3 percent (WTO 2000, p. xix), but the actual protection is often prohibitive for the CIS countries because of variable levies and technical standards. In addition, the EU is reluctant to give any preferences for farm goods from temperate countries and food products, that Ukraine produces and would like to export (Messerlin 2001, p. 28). EU minimal market access commitments in cereals under the Uruguay round prompted bilateral agreements on a duty-free quota of 300,000 tons of wheat essentially from the CEE, while the major grain producers in the CIS, not being members of the WTO, were left without access. The CEE countries are allowed to export meat, fruit and vegetables to the EU, and the EU has reciprocal protection through bilateral agreements with Bulgaria, Hungary and Romania, the main wine producers in CEE (WTO 2000, pp. 87, 91). As a result, EU imports of agricultural goods from the twelve CIS countries decline from1.5 billion euro in 1995 to 1.3 billion euro in 1998, while EU imports from the 13 EU candidate members were three times larger and rose somewhat, according to the EU Trade Directorate. The CIS country suffering the most from
