Protectionism caused losses for Ukrainian steel industry

Trade barriers against steel products cost 2% of Ukrainian GDP

Steelmaking is affected by protectionist measures much more than any other industry, since it has a high social significance and is well developed around the world. Every time the market sentiments deteriorate, we observe an increased pressure on foreign markets and resistance to exports. Interestingly, developed countries are especially proactive in these matters.

The regionalization of trade has a considerable impact on Ukraine. Sales of the domestic steel producers are 80% dependent on exports, and the steel industry accounts for up to 12% of Ukraine’s GDP. Therefore, Ukraine has suffered significantly greater losses from this trend as compared to other countries.

Various trade barriers imposed at different time periods have caused a decrease in the volumes of Ukraine’s steel exports, amounting to 3.3–3.5 million tons or about $3 billion in export revenues. The damage for Ukrainian economy from the introduced trade barriers in foreign markets is estimated at 1.8–2.0% of GDP.

The abolition of duties will have a positive impact not only on the economy of Ukraine, but also on the steel markets of the countries that introduced these duties, first of all, USA and EU. Expansion of steel trade with Ukraine will mitigate the negative consequences of the cessation of trade with Russia. By abolishing duties EU could also make the first step towards real European integration of Ukraine.