WT/REG353/M/1  
 
10 July 2017 
(17-3702) Page: 1/6 
Committee on Regional Trade Agreements  
Eighty -fifth Session    
 
DEEP AND COMPREHENSI VE FREE TRADE AREA C ONCLUDED AS A PART O F  
THE ASSOCIATION AGRE EMENT BETWEEN THE EUROPEAN UNION  AND UKRAINE  
(GOODS AND SERVICES ) 
NOTE ON THE MEETING OF 29 JUNE  2017 
Chairman: Ambassador Walid DOUDECH (Tunisia)  
1.1.  The 85th Session of the C ommittee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram  WTO/AIR/RTA/10/Rev.1 dated 16 June 2017 . 
1.2.  Under Agenda Item E.II of the session, the CRTA considered the  Deep and Comprehensive 
Free Trade Area concluded a s a part of the Association Agreement between the European Union 
and Ukraine, goods and services, (hereinafter "the Agreement").  
1.3.  The Chairman said that the Agreement had entered into force on 23 April 2014 for the 
European Union and 1 January 2016 for Ukra ine. It had been notified to the WTO by the Parties on 
1 July 2014 under Article XXIV:7(a) of the GATT 1994 and the Understanding on the Interpretation 
of Article XXIV of GATT 1994 as an Agreement establishing a free trade area (documents 
WT/REG353/N/1, WT /REG353/N/1/Add.1, WT/REG353/N/1/Add.1/Corr.1 -2) and under GATS 
Article V:7(a) as an Agreement providing for the liberalization of trade in services within the 
meaning of Article V of the GATS (documents S/C/N/744, S/C/N/744/Add.1 and 
S/C/N/744/Add.1/Corr. 1-2). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the goods and services aspects 
(document WT/REG353/1 dated 13 April 2017) and questions and replies on the Agreement 
(document WT/REG353/2 dated 8 June 2017) had been distributed.  
1.4.  The representative of the European Union  welcome d the Committee's consideration of the 
trade -related part of the Association Agreement between the EU and Ukraine. He expressed 
appreciation to  the WTO Secretariat for the preparation of the Factual Presentation and to the 
Ukrainian authorities for the ir excellent cooperation. He thank ed Members who ha d showed 
interest in the consideration of th e Agreement and ha d submitted written questions.  
1.5.  He recalled the broader economic and political context within which the Agreement under 
discussion should be situated . The legal framework of EU -Ukraine relations had been  laid down in 
the Association Agreement that had been  signed in 2014.  The Association Agreem ent constitute d 
the main pillar of EU -Ukraine relations aiming at political association and economic integration of 
both partners. Title IV of the Association Agreement establishe d a legal framework for the gradual 
creation of the Deep and Comprehensive Fr ee Trade Area (referred to as "DCFTA") which was 
under discussion in the meeting .  
1.6.  The DCFTA wa s a comprehensive Agreement that provide d gradual and substantial 
liberalization of trade in goods, services and – on a reciprocal basis - public procurement, pr ovided 
regulatory approximation to EU law was accomplished by Ukraine. Furthermore, the Agreement 
aimed at providing Ukraine with a framework for an extensive approximation of domestic 
legislation to EU laws and standards in trade -related areas.  
1.7.  It wa s still early to make a conclusive assessment of the results of the DCFTA on trade and  
investment flows. The Parties we re confident of the high potential and substantial benefits of th e 
Agreement that would  accrue in the medium -term thanks to the comprehensive trade liberalisation WT/REG353/M/1  
 
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  and economic reforms being carried out on the basis of the commitments. In 2016, the first year 
of DCFTA implementation, total trade between the EU and Ukraine had  increased by 10% . In the 
first quarter of 2017  trade between the EU and  Ukraine had increased by 28.5% which further 
underline d the positive trend in the growth of trade between the Parties.   
1.8.  In terms of trade in goods, the vast majority of customs duties on goods ha d been eliminated 
at the start of DCFTA implementation. Over all, after a 10 -year period, Ukraine and the EU would 
eliminate 97.7% and 97.9%, respectively, of import duties by trade value. For industrial goods, 
the calendar for liberalisation fores aw the immediate removal of tariffs on most products - with 
some exce ptions for a few products subject to a transition period such as the automotive sector in 
the case of Ukraine. Most agricultural goods ha d been liberalised. For certain sensitive products, 
market access ha d been improved through annual duty -free tariff rat e quotas for cereals, pork, 
beef, poultry and other products.  
1.9.  The Parties ha d agreed to enhanced co -operation in customs and customs -related matters to 
simplify customs requirements and formalities, while at the same time preventing fraud. The 
Protocol on  mutual administrative assistance in customs matters provide d a stronger legal 
framework for efforts to ensure the correct application of customs legislation and the fight against 
corruption and infringement of intellectual property rights.  
1.10.   In terms of tr ade in services, the DCFTA provide d for the freedom of establishment in both 
services and non -services sectors, subject to some limited reservations set out in a negative list. 
Provisions on domestic regulation establishing disciplines on measures related to licensing would  
improve transparency and legal certainty for investors. Furthermore, the DCFTA was 
complemented by a process of legislative approximation for selected services sectors.   
1.11.   The DCFTA include d an ambitious intellectual property chapter to fa cilitate the production 
and commercialization of innovative and creative products in the EU and Ukraine. The Agreement 
ensure d an adequate and effective level of protection and strong enforcement of intellectual 
property rights which complement ed and updat ed some provisions of the TRIPs Agreement. All 
agricultural geographical indication s - including those relating to wines and spirits - enjoy ed the 
same high level of protection. This protection was immediate for most EU GIs, but some names, 
long-used by Uk rainian producers, would be phased -out over a transition period.  
1.12.   This was the first EU Agreement to include specific provisions on trade -related energy 
issues. The chapter cover ed electricity, crude oil and natural gas (in gaseous state or as liquefied 
natural gas (LNG)) and t ook into account that Ukraine was already a member of the Energy 
Community Treaty (EnCT) and follow ed the regulatory approximation in the energy sector within 
that Organization.  
1.13.   Last but not least, the DCFTA contain ed robust provisio ns on trade and sustainable 
development reaffirming the Parties' commitment to ensuring coherence between trade policies on 
the one hand and social and environmental policies on the other. The Agreement therefore 
include d far-reaching provisions on the eff ective implementation of international conventions on 
labour rights and multilateral environment agreements. The DCFTA also improve d forest law 
enforcement and the promotion of trade in legal and sustainable forest products as well as 
responsible managemen t of fish stocks and promoting good governance in trade in fishery 
products. A strong role was also given to civil society organisations which were to be 
systematically involved in monitoring the implementation of these commitments.  
1.14.   The Agreement also incl uded cross-cutting transparency obligations and a dedicated 
Transparency Chapter. These provisions were already facilitating the flow of trade and investment 
between the Parties. The EU was looking forward to a fruitful discussion and would endeavour to 
answer all Members' questions in addition to the written answers  already provided .  
1.15.  The representative of Ukraine  welcome d the CRTA 's examination  of the provisions of the 
Deep and Comprehensive Free Trade  Area of the Association Agreement between Ukraine and  the 
EU. Ukraine was  grateful  to the Secretariat  for the preparation  of the Factual  Presentation.  
Ukraine also  thank ed the EU for the  cooperation  in the exercise  as well as Canada,  Japan,  
Thailand  and the R ussian Federation  for their questions and other Members for the interest show n 
in the consideration of the Ukraine -EU DCFTA.  WT/REG353/M/1  
 
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  1.16.   The DCFTA set up a free -trade area between Ukraine and the EU, in line with the principles 
of the WTO. Another important part of the Agreement was aligning Ukrainian trade -related l aws to 
selected EU legislative acts. Ukraine had started the provisional application of the DCFTA on 
1 January 2016. The main aim of the DCFTA was to remove  barriers in trade between the 
partners.  
1.17.   In terms of tariff liberalization the DCFTA cover ed more th an 97% of trade between Ukraine 
and the EU with immediate liberalization and transitional periods of three , five, and seven  years. 
The remaining  3% cover ed the m ost sensitive products for the P arties and were under a special 
preferential trade regime meani ng duty -free tariff -rate quota s for sugar, pork and poultry meat  or 
partial liberalization.  All DCFTA provisions were in the framework of the WTO Agreements and 
rules.  
1.18.   The DCFTA provisions also cover ed such areas as: food safety  and sanitary and 
phytosanit ary measures; technical regulations and standards for industrial goods; public 
procurement;  services; customs and trade facilitation; competition policy; intellectual property; 
and sustainable development and transparency.  
1.19.   Apart from the gradual market acc ess liberalization , directly linked to regulatory 
approximation , Ukraine ha d embarked on internal reforms in the areas of technical regulations and 
standards (TBT) and sanitary and phytosanitary measures (SPS) as these two areas indirectly 
determine d for exporters the  market access opportunities created by the elimination  and reduction 
of customs tariffs by the EU. Having in mind that industrial products safety and food safety were 
important not only in the context of exports to the EU but also in terms of protecti ng its own 
consumers, Ukraine ha d started the regulatory approximation and administrative capacity building 
process even before the start of the provisional application of the DCFTA. In the TBT area Ukraine 
should finish the committed legal approxi mation process in 2021.  
1.20.   For the implementation of the DCFTA provisions the Government of Ukraine had approved 
the detailed action plan of implementation of these  provisions of the EU -Ukraine Association 
Agreement for 2016 -2019 as well as some strategies an d roadmaps (TBT, SPS  and private 
partnership ) with the deadlines between 2020 , 2021  and 2023 . 
1.21.   Ukraine had started ambitious reforms in technical regulation s and standards. This process 
was conducted on the basis of the Strategy for the Development of the T echnical Regulation 
System until 2020  and the related Action Plan  adopted by the Ukrainian Government in 2016. 
Regarding the approximation process leading to an Agreement on Conformity Assessment and 
Acceptance of Industrial Products ( ACAA ) Ukraine ha d decided to focus on three  priority sectors , 
namely  machinery, low -voltage equipment, and electromagnetic compatibility.  
1.22.  Despite the severe political and economic external challenges Ukraine considered the 
Agreement to be  the most powerful instrument of suppor t of the Ukrainian economy, offering 
access to the vast European internal market for Ukrainian producers. It was intended to provide 
substantial liberalisation of trade and investment conditions and was leading to further 
improvement of trade conditions an d the investment climate through greater convergence with EU 
trade -related laws and practice.  Ukraine had started to fully benefit from the DCFTA on 1 January 
2016. From that time trade flows between Ukraine and the EU had been  increasing constantly.  
1.23.  The E U was Ukraine's largest trading partner and its role in the foreign economic relations of 
Ukraine ha d been constantly growing and it was the only partner with whom trade turnover had 
increas ed the previous  year. The share of EU trade in goods and services with Ukraine ha d 
exceeded 40% and ha d been growing. In 2016 the trade turnover between Ukraine and the EU ha d 
increased by 8.1% and amounted to US$30.6 billion. Exports of goods ha d risen by 3.7% 
(amount ing to US $13.5 billion) and imports of goods by 11.8%  (amount ing to US $17.1 billion). In 
January-March 2017 total trade had increased by 21.6%, export s by 24.5%, and imports by 19.2%.  
1.24.   Ukraine wa s looking forward to a fruitful discussion and would  endeavour to answer 
Members' questions in addition to the writ ten answers  that had already been provided . 
1.25.   As a neighbouring country of both the EU and Ukraine, t he representative of the Republic of 
Moldova  welcomed the consideration of the Agreement . The Agreement was oriented to wards  the WT/REG353/M/1  
 
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  removal of import and export  duties in trade in goods and obstacles to trade in services as well as 
stimulating better access for local companies to both the EU and Ukrainian markets. Her 
delegation acknowledged the significant efforts and reforms undertaken by the Ukrainian 
authorit ies with the European Union's support regarding the promotion and the implementation of 
the European Union's principles, regulations and trade standards in the Ukrainian legal and 
institutional framework. The Republic of Moldova looked forward to seeing th e benefits of the 
implementation of the Agreement  and looked forward to connecting to the region's largest trading 
block which was the D eep and Comprehensive Free Trade Area which  the Republic of Moldova had 
also signed and that had entered into force in J uly 2016  with the European Union . 
1.26.   The representative of Georgia  joined the Republic of Moldova in congratulating the EU and 
Ukraine for concluding an important and comprehensive FTA which was part of the Association 
Agreement. It was one of the biggest ach ievements for all DCFTA countries  including Georgia and 
it was an important Agreement for Georgia's economic development and the integration of 
Ukraine, Georgia and the Republic of Moldova to the EU. He wished Ukraine success with the 
economic commitments undertaken in the Agreement. The Agreement envisaged legal 
approximation and provided the opportunity to align Ukraine's standards with EU standards.  
1.27.   The representative of Thailand  thanked the Parties for the detailed responses to its 
questions on the Agre ement's general provisions, trade in services and the Parties' liberalization 
commitments. Thailand reserved the right to submit any further questions in writing if necessary.  
1.28.   The representative of Canada  thanked the Parties for their responses to Canada's  written 
questions. Canada had no follow up questions.  
1.29.   The representative of Japan  thanked the Parties for their responses to Japan's questions. 
Japan had no further questions.  
1.30.   The representative of the Russian Federation  said her delegation had submitted several 
questions on the EU -Ukraine DCFTA and was studying carefully the Parties' responses . She had  
additional questions and observations on the Agreement.  
1.31.   As indicated in para graph  1.14 of the Parties' responses (document WT/REG353/2) , both 
sides were having discussions on the approval of the SPS strategy. She asked w hen the strategy 
would be finally approved , where it was possible to get knowledge about  it, what legislative acts 
already exist ed and what was to be approved in this sphere . In addition, she enquired about the 
schedule for the adoption of bylaws . Her delegation only had knowledge of general data but 
needed more detailed information for business.   
1.32.   On 18 May 2017 under the Comprehensive Strategy of the Implementation of Chapter IV 
(sanitary and  phytosanitary measures) of the Agreement , the Verkhovna Rada had adopted the 
Law of Ukraine "On State Control, which is carried out in order to verify Compliance with the 
Legislation on the Safety and Quality of Food and Feed, Animal Health and Welfare " (registration 
no. 0906), which continue d to reform the system of state food safety control and require d the 
adoption of more than 40 bylaws. She asked how Ukraine  planned to organize work on the 
adoption of bylaws . Which bylaws ha d already being worked out and which were planned to be 
adopt ed? When would  they be accepted and in accordance with which schedule? How was the 
health and welfare of animals and food safety guaranteed in the absence of implementing acts in 
Ukraine?  
1.33.   Regarding the answer in paragraph 1.6 of document WT/REG353/2 , it was not clear from 
the explanations given what the mechanism was for making decisions on amend ing Ukrainian 
legislation resulting from  changes in EU legislation, what was the priority, what was the time lag 
between the two e vents  (the adoption of Ukrain ian legislation and the adoption of EU legislation) , 
how would  the activity be organized, how would  financing carried out, how would changes  be 
made publicly available  and under  what terms (the question of transparency), and what would 
happen if changes in EU legislation that Ukraine  should make in its legislation  in accordance with 
Article 56.5 conflict ed with Ukraine's international obligations with third countries.  WT/REG353/M/1  
 
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  1.34.   The Russian Federation  believe d that the EU -Ukraine DCFTA was an exemplary case of a 
situation whe re a free trade area worsen ed trade conditions for other trading partners, and thus 
was not compatible with GATT Article XXIV:4 and GATS Article V:4. 
1.35.   In accordance with Article 39.1 the Agreement stipulate d that it sho uld not preclude the 
maintenance or establishment of customs unions, free trade areas or arrangements for frontier 
traffic except insofar as they conflict ed with  trade arrangements provided for in th e Agreement.  
1.36.   Trade relations between Russia and Ukraine had traditionally played an important role for 
both States since the early 1990s. Tariff liberalization between the CIS countries and Ukraine since 
the 1990s had been  accompanied by the harmonization of trade legislation.  In particular Article 11 
of Free T rade Area Treaty signed in St Petersburg in  October 2011 stipulate d that the parties 
should  cooperate in the area of TBT on the basis of the agreement on coordinated standardization, 
metrology and certification policies of 13 March 1992 . The latter agreeme nt provided for the 
recognition of  the current GOST standards as interstate standards  and the harmonization of their 
requirements.   
1.37.   The Agreement on Principles of the Conduction and Reciprocal Recognition of Certification 
Activities of June 1992, to which Ukraine was a party  stated that  the parties should carry out 
mutual recogni tion of  certification bodies, testing laboratories (centers), test results and 
certification and conformity marks for mutually supplied products.  She also mentioned a bilateral 
Agreement between the Government of the Russian Federation and the Cabinet of Ministers of 
Ukraine on cooperation in the field of plant quarantine, signed on 7 June 2011.  
1.38.   To sum up, there were dozens of bilateral and multilateral agreements in the field of tra de 
and investment that link ed Ukraine with the CIS countries. Many of Ukraine 's commitments were 
inconsistent with its obligations under the EU -Ukraine Agreement.  In view of the above, the DCFTA 
did not seem to be in compliance with the requirements of GATT Article XXIV and GATS Article V 
not to raise barriers to the trade of other contracting parties.  She posed the following follow up 
question to the Parties: how could they commit the application of Article 39.1 in practice given the  
simultaneous existence  of two conflicting legally binding trade arrangements  provided by the 
EU-Ukraine Agreement and a rrangements with  the CIS. In connection with such dualism h ow did 
the P arties ensure the fulfillment of their obligations of not worsening trade conditions in 
accordance with GATT Article XXIV:4 and GATS Article V:4 ? 
1.39.   She recalled that in order to mitigate the contradiction in 2014 -2015 the Russian Federation  
had proposed a number of steps to preserve Russia -Ukraine trade and economic relations and to 
resolve its concerns by adjusting certain provisions under the EU -Ukraine Agreement in a legally 
binding form. The Russian Federation was  denied this opportunity with reference to the inviolability 
of the Agreement that had been signed and ratified by only several  EU Member States. However, 
this stance did not preclude the EU from finding a legally binding decision that included partial ly 
altering the Agreement in order to pave the way for its ratification by the Netherlands.  
1.40.   In accordance with Article 273 of the EU-Ukraine Agreement which stated that "as regards 
transport of electricity and gas, and in particular third -party access to fixed infrastructure, the 
Parties shall adapt their legislation as referred to in Anneх XXVII to this Agreement and in the 
Energy Community Treaty of 2005… ", the Law of Ukraine "On the N atural Gas Market" of 8 May 
2015 had been  adopted in order to fulfill Ukraine's obligations under the Treaty on the 
Establishment of the Energy Community an d the Association Agreement between Ukraine and the 
EU. 
1.41.   According to this law, an operator of Ukraine's gas transportation system aside from state -
owned business entities  could  be exclusively a person (persons) from a State (states) which was a 
part of the  Energy Community or the United States of America and must have not less than five 
years of experience in the management of a gas transmission system in the EU or US market . 
What wa s the justification for the adoption and implementation of the above -mentio ned 
requirements, limiting acc ess of third party (other tha n EU and US) operators to the Ukrain ian gas 
transportation sector? Taking into account that those requirements appeared after signing the 
EU-Ukraine Agreement as implementing its respective provisi ons, how did this correspond to GATT 
Article XXIV:4 and GATS Article V:4 ? To conclude , according to UKRSTAT since the beginning of WT/REG353/M/1  
 
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  the implementation of the Ukrain ian side of the Agreement, Ukraine's volume of trade with the EU 
had declined. She would be g rateful if the Parties would comment on the reasons behind that.  
1.42.   The implementation of the EU -Ukraine Agreement had taken  place simultaneously with 
persistent trade restrictions in Ukraine. Since 2014 Ukraine ha d adopted a universe of restrictions, 
prohib itions, requirements and procedures with the effect of discrimination towards  persons, goods 
and services of the Russian Federation and the drastic restriction of bilateral trade as well as 
transit. Оn 19 May 2017 Russia had requested consultations with the Government of Ukraine 
pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Gover ning the 
Settlement of Disputes , Article XXIII of the General Agre ement on Tariffs and Trade 199 4, 
Article  XXIII of the General Agre ement on Trade in Services 1994 , Article 14.1 of the Agreement  
on Technical Barriers to Trade , Article 6 of the Agreement  on Import Licensing Procedures , 
Article  11.1 of the Agreement on the Application of Sanitary and P hytosanitary Measures with 
respect to multiple restrictions, prohibitions, requirements and procedures adopted and maintained 
by Ukraine in respect of trade in goods and services between the Russian Federation and Ukraine 
as well as transit since 2014.  
1.43.   According to UKRSTAT , since the beginning of the implementation by Ukrain e of the 
Association Agreement with the EU, Russia's share in the foreign trade turnover of Ukraine ha d 
significantly decreased, and the share of EU countries ha d grown. At the same time , Ukraine 's 
volume of trade with both Russia and the EU ha d declined.  Russia's share in the total volume of 
Ukraine's trade was 20.8% ( US$22.48 billion) in 2014 and 11.6% ( US$8.75 billion ) in 2016. 
Compared with 2014, turnover had decreased by 61.08 %. The share of EU countries amounted to 
35.1% (US$38.06 billion) in 2014 and 40.5% ( US$30.6 billion) in 2016. Compared with 2014, 
turnover had decreased by 19.57 %. 
1.44.   At the same time, the business climate for Russian operators of foreign trade ha d worsened. 
Russia 's share in Ukraine's total imports was only 13.2% ( US$5.16 billion) in 2016 compared with 
23.3% (US $12.68 billion) in 2014. Therefore, imports had decreased by 59.34 %. The share of EU 
countries in Ukraine's total imports was 38.7% ( US$21.06 billion) in 20 14 and  43.7% 
(US$17.11  billion) in 2016. In comparison with 2014 , import s had fallen  by 18.76 %. She asked 
the Parties to comment on the reasons behind that.  
1.45.   The Chairman  said that consideration of the Goods and Services Aspects of the Deep and 
Comprehensiv e Free Trade Area concluded as part of the Association Agreement between the 
European Union and Ukraine ha d allowed the Committee  to clarify a number of questions and it 
could  now conclude oral discussion of th e RTA in accordance with paragraph 11 of the 
Transparency Mechanism. If any delegations wish ed to ask follow -up questions they were invited 
to forward submissions in writing to the Secretariat by 6  July 2017 and Parties were asked to 
submit replies in writing by no later than 20  July 2017. In accordan ce with paragraph  13 of the 
Transparency Mechanism all written submissions, as well as minutes of this meeting would  be 
circulated promptly, in all WTO  official languages, and would  be made available on the WTO 
website.  
1.46.   The Committee took note  of the comments made.  
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