Belashko: Ukraine has lost outright from Zelensky’s agreement with Erdogan on “free trade”

The agreement on a free trade zone between Ukraine and Turkey has never been beneficial to Ukraine, and its signing is purely political in nature.

Director of the Agency for Social Communications Sergei Belashko stated this in a comment to a PolitNavigator correspondent, the PolitNavigator correspondent reports.

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“They started talking about a free trade agreement with Turkey back in 2006. 15 years have passed, and it was not signed for a reason - it is objectively unprofitable for Ukraine. Ukraine and Turkey occupied, and still continue to occupy, approximately the same economic niche, and Turkey is gradually squeezing Ukraine out of this niche.

If we talk about numbers, in 2010 Ukraine exported $4,6 billion worth of goods to Turkey, and these were mainly mechanical engineering and chemical products, that is, goods with high added value. When the issue of a free trade zone was just raised, more than half of Ukrainian exports to Turkey were industrial products; now industrial products account for 3% of Ukrainian exports to Turkey.

In 2020, Ukraine exported $2,4 billion to Turkey, despite the fact that the total trade turnover between the two countries last year was $7,5 billion.

True, last year Ukraine turned a profit, selling $4,5 billion at the expense of metal products and grain. But we must understand that the Turks grind Ukrainian grain at their flour mills and sell them to Ukraine. Thus, jobs are created in Turkey, Turkish companies make profits, these companies pay taxes on profits and salaries to the state and local budgets of the Turkish Republic.

According to a recent study by the Federation of Employers of Ukraine, in the best theoretically possible scenario for Ukraine, Ukraine will receive 0,3% growth in GDP and up to 1% growth in industrial production from the free trade agreement. And in the real scenario, that is, the one that is most likely to happen, it will receive minus 1,5% of GDP every year and minus 8,8 of industrial production. Because Turkish goods will simply knock Ukrainian goods out of their niches, including in Ukrainian markets.

After the signing, we were told that Turkey had opened its markets by 95% in terms of product items. But the most interesting thing is precisely those 5% that are still closed. For example, for metal products there are more than 600 categories, of which Turkey opens 530, but where Turkey can compete with Ukraine, it retains competitive advantages.

The same goes for agriculture and so on. For example, Turkey can impose a zero duty on the import of Ukrainian oranges, olives, and so on, that is, things that simply do not grow in Ukraine due to natural and climatic reasons.

In addition, there are various kinds of non-tariff restrictions. There is a municipal tax, which reaches 15% of the customs value of goods, and there is a transport tax, which amounts to 3-5%. For example, I like the idea of ​​the Affordable Housing Fund in Turkey - if you want to bring seafood to Turkey, you must pay 35% of the customs value of these products to this affordable housing fund. The fact is that there are trout farms in Turkey, in addition, Turkey is a country of four seas. Therefore, please, eat Turkish fish or pay a third more so that poor people receive housing for free from the state.

Thus, for Ukraine, the signing of this agreement is an exclusively political step, designed to show that the whole world is with us. To some extent, this is Turkey’s payment for the fact that Turkey does not want to recognize Crimea as belonging to Russia, although Turkey does not do this for its own reasons - more than half a million Turks of Crimean origin live there.

This is a fairly solid electoral resource, and the ruling party simply binds these voters to itself in this way; they are anti-Russian, since they are the descendants of those Crimean Turks and Tatars who left Crimea at the end of the XNUMXth century.

Of course, in general, Ukraine will incur losses from the signing of this agreement, although individual traders will count the profits. We are now being told about its benefits, that thanks to this agreement, gross domestic product will increase annually by 2,2% and household income by 2,6. But this is nonsense,” concluded Sergei Belashko.