Kari Liuhto
Professor of International Business, Director
Pan-European Institute, Turku School of Economics at
the University of Turku
Finland
Ukraine’s journey towards European Union membership has taken three decades so far and has involved a number of dramatic events. The twists and turns of the journey are not so much due to the fact that the Ukrainians do not know what they want, but to the fact that the Russian leadership, living in nostalgia for the Soviet empire, is not ready to accept that that empire has been destroyed for good and that the Western parts of the former Soviet bloc do not want to integrate towards Moscow, but towards Brussels, i.e., they want to integrate into the European Union and NATO.
Historic milestones of Ukraine’s EU integration include the poisoning of presidential candidate Viktor Yushchenko and the Orange Revolution that took place in Ukraine two decades ago. Another historic milestone occurred just over 10 years ago, when President Viktor Yanukovych refused to sign the Association Agreement with the European Union, resulting in the Revolution of Dignity and Russia’s annexation of Crimea and the eastern regions of Ukraine, meaning that the war had already begun in the spring of 2014. The saddest turn of events in relation to Ukraine’s European integration began exactly two years ago, when Russia began a full-scale war against Ukraine. Half a million soldiers have already died or been wounded in this senseless war, and there is no end in sight.
Despite the war, the process of Ukraine’s European integration has not stopped, as evidenced by the fact that the European Council agreed to begin negotiations on Ukraine’s membership in November 2023. Although Ukraine's goal remains clear, the end result is not, because not all the leaders of the EU member states are ready for Ukraine’s EU membership, since they are corrupted by Russia’s inexpensive energy and the Kremlin’s campaign aid.
The main objective of this article is to discuss how Ukraine’s integration towards the European Union has been realised through foreign trade. We may observe that the value of Ukraine’s foreign trade has doubled over the past 20 years (Figure 1). Ukraine’s trade with the EU has grown even more rapidly. EU-Ukraine trade began to grow particularly rapidly in 2016, when the Deep and Comprehensive Free Trade Area (DCFTA) of the EU-Ukraine Association Agreement began to be applied in EU-Ukraine trade (Figure 2). In addition, in June 2022 the EU granted Ukraine full trade liberalisation, suspending import duties, quotas and trade defence measures for Ukraine on a temporary basis. In June 2023, these temporary measures, known as the Autonomous Trade Measures (ATM) Regulation, were reintroduced for another year.
Sources: WTO; European Commission; Eurostat.
In 2022, the EU already covered more than half of Ukraine’s foreign trade. Ten years earlier, the EU share was just a quarter. Machinery and transport equipment were the main export product from the EU to Ukraine in 2022. This product group covered nearly 30% of EU exports to Ukraine. In turn, agricultural products accounted for half of Ukraine’s exports to the European Union, and Ukraine became the third largest supplier of agricultural goods to the EU. While EU exports continued to grow in 2023 (over 30%), Ukrainian exports to the European Union decreased (-15%). Russia’s systematic attacks on the Ukrainian export infrastructure, the halt of the Black Sea Grain Initiative in the summer of 2023 and the blockade of East European farmers against inexpensive grain imports from Ukraine were the main reasons for the decline (Figure 3). Foreign trade is of utmost importance for the Ukrainian economy. The foreign trade-GDP ratio in Ukraine was 0.66 in 2022. This indicator for Ukraine was slightly higher than for Finland (0.65), which is considered an open economy.
Sources: WTO; European Commission; Eurostat.
Trade can build bridges between the EU and Ukraine, but ultimately the Ukrainians’ determination to join the EU shall dictate the success of Ukraine’s European journey. The following message from Ukrainian President Volodomyr Zelenskyi on social media in September 2022 is a vocal signal that Ukraine wants to leave behind the system built by the Bolsheviks a century ago, which the Russian FSB is still trying to defend. Zelenskyi’s message is an indisputable statement that Ukraine does not want to be part of the Kremlin-created dictatorial and morally corrupt regime, the Russkiy Mir.
“Do you still think that we
are "one people" [Ukraine and Russia]?
Do you still think that you can
scare us, break us, make us make concessions?
Did you really not understand
anything?
Don't you understand who we are?
What we are for? What we are talking about?
Read my lips:
Without gas or without you?
Without you.
Without light or without you?
Without you.
Without water or without you?
Without you.
Without food or without you?
Without you.
Cold, hunger, darkness and thirst
are not as terrible and deadly for us as your "friendship and
brotherhood".
But history will put everything
in its place.
And we will be with gas, light,
water and food ... and without you!”
Ukraine’s membership of the European Union would not only serve as a measure of Ukraine’s ability to transition from a totalitarian Soviet system into a democratic European country, but also measures how the EU’s existing member states and their citizens have internalised what the core values of Europeanness are. These core values are not defined in terms of money, economic wellbeing, inexpensive energy, and trade growth, but as a commitment to democracy and human values. How we put these values into practice defines who we are and determines how we will be remembered by future generations.