: :inin Kyiv (EET)

Possible EAEC expansion poses no threat to Ukraine`s foreign trade: Da Vinci AG forecast

The possible expansion of the Eurasian Economic Community (EAEC) does not represent a serious threat for Ukraine`s foreign trade, according to a forecast of the Da Vinci AG analytical group provided to UNIAN.

Chairman of the State Duma Committee on CIS affairs Leonid Slutsky suggested that Tajikistan may this year express its intention to join the EAEC.

At the same time, pro-Russian rhetoric is on the rise in Moldova, Da Vinci AG experts noted. Russia and Moldova have intensified discussions about the ”roadmap” to restore trade relations between the two countries.

”The issue of Moldova`s membership to the EAEC is not yet actively displayed in the information space, but we expect that in the autumn this topic may be strongly debated. Moldova`s political transformation through Transnistria`s integration into the republic could create the necessary basis for practical implementation of admission to the EAEC,” the forecast stated.

Two new members may, therefore, join the EAEC in 2017-2018 – Tajikistan and Moldova.

”The possible expansion will have a solely geopolitical impact and will not result in any significant economic synergy processes within the EAEC,” Da Vinci AG predicted.

Analysts believe that Russia will seek to consolidate its area of influence in the west and in the south, having secured additional leverage not only in these countries, but also in Uzbekistan and Ukraine, which are beyond its control.

”We expect that the Russian Federation`s plans in Tajikistan will be challenged by China and the United States, and in Moldova by the United States, Romania and Ukraine. However, till date, we estimate the probability of Tajikistan`s joining the EAEC at 70% and Moldova`s admission at 50%,” the report said.

Further, Da Vinci AG analysts do not expect any significant impact on Ukraine`s foreign trade following the possible expansion of the EAEC.

”Exports to Moldova and Tajikistan demonstrate a steady downward tendency. In 2015, exports to Moldova fell by 29.5% (total worth $520 million) and a decline of 5.4% was recorded in the first five months of 2016. A more adverse trend was seen in Tajikistan. In 2015, Ukrainian exports to that country `dipped` by 35.8% (total worth $30 million), while it was down by 45% in the five months of 2016,” Da Vinci analysts stated.

”It is necessary to take into account that in the near future Moldova will try to tackle issues through foreign trade turnover, boosting exports and limiting imports. In this context, a drastic increase in exports to this country is not expected. In addition, Ukraine is a major importer to Moldova and an important transit country, primarily for goods coming from the EAEC. Therefore, in case of Chisinau`s integration into that union, Ukraine will have every opportunity to exert pressure on the Eurasian Union. This leverage can be used not only in the context of future renewal of relations with Moldova in case it joins the EAEC, but also in trade issues with Russia regarding transit to Central Asian countries and Kazakhstan,” analysts added.


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