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Benefits from Trump: New window of opportunity for Ukraine

Author : Yuriy Panchenko

18:35, 31 January 2017
Benefits from Trump: New window of opportunity for Ukraine

Author : Yuriy Panchenko

Barriers to Chinese imports will slow down its economy, affect the position of Chinese manufacturers in all markets, and Ukraine might get more economic opportunities

18:35, 31 January 2017

Read the original text at eurointegration.com.ua.

Bloomberg

The issue of new risks for Ukraine in the presidency of Donald Trump become the leading theme among domestic and foreign political scientists in recent months. Everyone wants to predict the new reality for Ukraine and new opportunities.

Related: Economy of Kremlin-controlled Crimea: Steady decline

Such opportunities were voiced at the 10th Forum "Europe - Ukraine" held in the Polish city of Rzeszów. It is the largest specialized forum of the EU dedicated to Ukraine directly, so the discussion here can be quite revealing. Of course, the key theme of this forum was placing Ukraine under the new conditions, especially after Trump’s victory in the US.

However, conclusions of these discussions often differ depending on whether they were carried on a political panel or the economy.

Related: Economy Ministry: Ukraine needs to develop exports and tourism

"News coming from the United States in recent days, is extremely disturbing. Despite the hope of more moderate course of Trump, general expectations are very disappointing," said the MEP Rebecca Harms.

However, these estimates are not surprising. Especially surprising are expectations of the economic panel. There cautiously acknowledge that Trump's controversial foreign policy can benefit Ukraine.

This is keeping White House’s key promise - limiting the influence of China. First of all - the dominance of the Chinese economy. Such steps could create new opportunities for third countries, including Ukraine.

"Barriers to Chinese imports will slow down its economy. This will affect the position of Chinese manufacturers in all markets, including in Europe. Ukraine may get more opportunities," notes the director of Razumkov Center economic programs Vasyl Yurchyshyn.

Related: Lipetsk factory will be closed for economic and political reasons, - press secretary

However, he adds cautiously that this window of opportunity is not enough. "New opportunities may appear, but the question is whether Ukraine would use them," he added.

We have to admit, this forecast is almost fantastic. At least because one of the incentives of Ukrainian exports should be access to Asian markets, including Chinese. The first steps in this direction (it is worth was last year’s opening of the Chinese dairy market for Ukrainian exporters) have been quite successful.

And accordingly, the question is whether there will be more global trade disadvantages than advantages for Ukraine.

However, this idea was voiced by business representatives. Although often - unofficially. "Ukraine’s FTA with the EU and Canada provides significant benefits. In case of problems for Chinese manufacturers these benefits may be the key," said the head of one of the European companies interested in investment in Ukraine.

Related: Davos and populist fervour: Key points of World Economic Forum 2017

Ukrainian officials unofficially talk on the possibility of attracting new investments to Ukraine - it is due to the possible redistribution of world markets.

Therefore, the key question is whether Ukraine is able to take advantage of this opportunity? The answer is quite simple - it depends on the success of current reforms. And here the investors traditionally have different opinions.

"The reforms are really impressive. They give reason to say that the country is slowly changing," says CEO of Swedish CEB Ukraine Christian Anderson. However, many on the sidelines give a slightly different assessment: "Ukraine remains a country which should be watched closely, waiting for the best moment to invest, but still abstain from it."

Related: Peskov: US sanctions against Russia hurt world economy

Moreover, speaking of new opportunities, do not forget about new risks.

"Ukrainian economy experienced its worst period in terms of relatively favorable world market conditions - energy prices have fallen significantly, and prices for metals and agricultural products were relatively high. Instead, Ukraine is now in a much less favorable position when rising energy prices will be faster than for the metal and food," warns the head of a regional BNP Paribas Dominique Menu.

Related: How and why will Ukrainian economy grow in 2017?

Although the chance to benefit from the US-China conflict is quite ephemeral, however, we can agree with another forecast, which always sounded at a forum in Rzeszów.

New times would significantly increase the price of each error of Ukraine.

Accordingly, the consequences of our action or inaction can now be much more serious than a year ago.

Related: 2016 in review: Ukraine's main economic results

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