Page 25 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.74, # 1, 2017, pp. 23-33

instruments including Framework of Standards to Secure and Facilitate Global
Trade of 2005 developed by World Customs Organization. According to the Annex
XV Ukraine is to approximate its legislation to most of the articles of the Regulation
(EC) No 450/2008 of the European Parliament and the Council of 23 April 2008
laying down the Community Customs Code (Modernized Customs Code).
The EU−Ukraine Association Council noted that the volume of trade between
Ukraine and the EU increased by 7.5% in the period from October 2015 to
September 2016 in comparison with the previous period. Ukraine has established a
program for authorized economic operators in accordance with the World Customs
Organization recommendations, applied for accession to the Regional Convention
on pan-Euro-Mediterranean Preferential Rules of Origin, approved the draft
Comprehensive Strategy of Reforming Sanitary and Phytosanitary Supervision
System in Ukraine and the Roadmap for the system of public procurement reforms.
A dialogue was initiated on the conclusion of the Agreement on Conformity
Assessment and Acceptance of Industrial Products (Ministry of Economic
Development and Trade of Ukraine 2016).
But trade security issues at the macro-level or the level of industries also
involve sustaining competitiveness of domestic producers under open economy,
optimization of foreign trade structure, stability of trade flows, and dependency on
markets and suppliers. In our study we concentrate on these issues of trade security.
1. Recent literature. Trade links of the EU with Ukraine and Turkey were
discussed in several studies. Bayar and Ozekicioglu (2014) stated that customs union
between Turkey and the EU resulted in trade creation effect and no trade diversion
effect with third countries. Trade deficit of Turkey increased, but as a result of trade
with non-EU countries. Turkey increased its competitive advantage in 50 groups of
goods (some manufacturing industrial products) and lost in 17 groups (mainly some
agricultural and textile products), while 188 groups remained unaffected.
Seymen and Gümüştekin (2012) found that only 5% of Turkish exports to the
EU were R&D intensive goods, while the share in imports was 15%. Togan (2011)
claimed that the customs union provided additional benefits for the EU exporters in
the third countries, because Turkey was able to establish free trade areas with third
countries after the EU, which put exporters in Turkey into disadvantageous position.
Dabrowski and Taran (2012) described Ukrainian exports as concentrated on
steel, fertilizers and agriculture. Konchyn (2016) found that Ukraine has
traditionally high Revealed Comparative Advantage indices for iron ore and
concentrates, some iron products, vegetable oils, electricity, coal, raw wood,
fertilizers etc. New comparative advantages appeared in recent years in case of
maize, oil seeds, feeding staff for animals etc. Didkovska (2013) stated that Ukraine

25