Belarus-Ukraine trade to exceed USD 3 billion in 2009

In 2009 the trade between Belarus and Ukraine will exceed USD 3 billion, First Deputy Prime Minister of Belarus Vladimir Semashko said as he met with Foreign Minister of Ukraine Piotr Poroshenko in Minsk on 19 October.

The bilateral trade and economic relations had been vibrant and reached USD 5 billion in 2008. "This year the prospects are not that good. We are somewhere at the level of 2007. I think that in 2009 the trade will be over USD 3 billion. This is not bad comparing with the trade with other countries," Vladimir Semashko said.

For his part, Piotr Poroshenko said that the drop in Belarus-Ukraine trade was due to the objective reasons. The trade was affected by the crisis in the banking sector. There were fewer loans to finance the purchases. Yet the sides have preserved the infrastructure, traditional cooperation links and can bring the trade to the pre-crisis soon, the minister believes.

Belarus is ready to supply up to 100,000 tonnes of sugar to Ukraine, said Belarus First Vice Premier Vladimir Semashko. "We know that Ukraine has some troubles with sugar and are ready to supply up to 100,000 tonnes according to the terms that we have yet to agree," said Vladimir Semashko.

In his words, joint implementation of investment projects for starting up caramel production in Belarus looks promising. The products can be sold on the Belarusian market and supplied to Russia and Kazakhstan.

Vladimir Semashko also remarked that Belarus and Ukraine had settled the issue with Ukrainian caramel supplies to Belarus. With antidumping duties on these products lifted, the supplies of Ukrainian caramel have surged. All in all, according to Vladimir Semashko, Ukrainian and Belarusian sides have an understanding about antidumping matters and plan to routinely address such issues in the future without starting antidumping investigations.

In turn, Piotr Poroshenko underlined that Belarus' decision to lift antidumping duties on three Ukrainian confectioneries is very important. Belarusian partners demonstrate their good will, he stressed.

Ukraine is supposed to increase Belarusian machinery purchases soon, said Ukrainian Foreign Minister Piotr Poroshenko. He attributed the bilateral trade decline to the banking industry crisis, which led to reduced borrowing available for product purchasing. "In the first half a year rural people could not take out loans to buy tractors. Municipal authorities did not have money to buy buses," he said. According to the Minister, now the situation is changing for the better.

The Ukrainian budget has allocated funds for financing agricultural leasing. "If at present commercial banks cannot provide full crediting support to our farmers, the budget will relieve part of the burden," remarked Piotr Poroshenko.

Purchases of Belarusian tractors are supposed to be restored. "I can say the same about buses and trolley buses," said the Minister. MAZ buses are supposed to be allowed participating in purchase tenders in Ukraine. "Despite legal restrictions on participation of non-Ukrainian companies, we have found a way. MAZ buses will be finished at a Ukrainian plant to be able to participate in tenders," said the Ukrainian Foreign Minister.

Ukraine is one of Belarus' major trading partners. In 2008 Ukraine was Belarus' second biggest trading partner in the CIS and third in the total foreign trade. In turn, Belarus was seventh biggest trading partner of Ukraine. In 2008 the trade between the two countries was USD 4.9 billion, export - USD 2.8 billion, import - USD 2.1 billion. Belarus had a trade surplus of USD 674 million in trade with Ukraine.

Amidst the global financial and economic crisis in January-August 2009 the Belarusian export to Ukraine dropped down to USD 1017.8 million or 49.1% as against January-August 2008. The import fell down to USD 784.5 million or by 46.1%. The trade surplus of Belarus made up USD 233.3 million. In august 2009 the export reached USD 170.5 million or 54.3% as against the same period a year before.

In 2009 Belarus supplied 32 new commodity items, including butter (worth USD 30 million), milk powder (USD 8.5 million), matches (USD 1.8 million), milk whey, casein, animal oil, waste paper, children's clothing, etc. The supplies of sugar grew by one third up to USD 17.8 million, plastic containers by 58% up to USD 13.3 million, hot-rolled rod from non-alloy steel by 27% up to USD 9.2 million, lacquers and paints 4.5 times up to USD 1.7 million.

The bulk of imports from Ukraine includes intermediate and investment goods that exceeded 90% of the import. They include metal products, spare parts, oilcakes and sunflower oil for the production of feed-stuff, lacquers and paints, combustion turbines and wagons.

The coordinated efforts helped minimize the impact of the global economic crisis on the bilateral trade and maintain the export to Ukraine at the level of 25.3% above the level of 2007.

Over 100 objects of the distribution network of the Republic of Belarus have been established in Ukraine and their number is constantly growing. They include trading houses of MTZ, Belshina, Keramin, affiliates and joint ventures of BelAZ, Gomelsteklo, Mogotex, Milavitsa, Conte and other Belarusian manufacturers. In 2003 the Belneftekhim concern opened a trading company in Kiev.

National exhibitions of the two countries are held on the regular basis. In August and October 2009 exhibition/fairs of the manufacturers from Minsk, the Minsk and Gomel oblasts were a great success in Kiev.



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