SWOT-analysis of the harmonization of technical requirements for trade with the EU acquis from Ukrainian key stakeholders groups positions

1. SWOT-analysis of the harmonization of technical
requirements for trade with the EU acquis from
Ukrainian key stakeholders groups positions
Tetiana Zosymenko,
PhD, Associate Professor of Theoretical and
Applied Economics Department

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ASSOCIATION AGREEMENT
between the European Union and Ukraine
Deep and Comprehensive Free Trade Area (DCFTA)
Removing trade barriers, including technical regulations
Harmonization of legislation of Ukraine for technical regulation
with the acquis communautaire
The Goal: to create an efficient and transparent infrastructure
for technical regulation (so-called quality infrastructure) –
a system of institutions and institutional structures that
cumulatively ensure the implementation of standardization,
metrology and accreditation processes in the national economy
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3. The New Approach – the European Union directives defining “essential
requirements” related to health, safety and environmental issues. Products must
meet these requirements in order to be placed on the European market.
Keyprinciples
Proportionality of risk: the level of complexity of the procedures
for assessing conformity and product safety requirements during
manufacturing is proportional to the degree of risk posed by
products
Public-private approach: conformity assessment and verification
shall not be made entirely by the government bodies; private
organizations are also entitled to implement such procedures
Preventing conflict of interests: standards are developed by
independent competent bodies; institutions and administrative
bodies, whose combination may pose a conflict of interests, must
be separated
Voluntariness: application of harmonized or other standards
remains voluntary, and the manufacturer may always apply other
technical specifications to meet the requirements
Post-market control: technical regulations shall not apply to the
process of designing and manufacturing of products, and sets
requirements for performance characteristics, related to safety of
products
Domestic Approach
Various types of regulations spread on one product.
They often are contradictory and create regulatory
burden on business
Standardization in Ukraine still has not become a
voluntary procedure, which would allow to confirm the
specific properties of the product, taking into account
the needs of both producers and consumers
Warranty: the government guarantees adequate technical
competence of private organizations of quality Infrastructure
Current institutional subordination of ministries and
agencies often leads to conflict of interests,
exacerbating the situation of enterprises, institutions
and organizations.
Pre-market control prevails (in the form of state
registration, examinations, certifications, conclusions,
etc.)
Unclear definition of competences of supervisory bodies
leads to duplication of control objects, lack of
responsibility and the inability assessing the
effectiveness of state control
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4. 4
National metrology
institute
National accreditation body
Definition of units
(may be required in standards)
Accreditation body standards
Governmemtinfrastructure
fortechnicalregulation
Calibration
certificate
required for
laboratory
accreditation
Certification
bodies
Inspection
bodies
Testing
laboratories
Calibration
laboratories
Privateinfrastructure
fortechnicalregulation
Enterprises
Setting standards
for activities of
private
organizations
Certification Inspection
certificate
Testing
report
Calibration
certificate
National standards
body or bodies
The institutional frame of the quality infrastructure in
accordance with the principles of the New Approach
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5. SWOT-analysis of the harmonization of technical requirements for trade with the EU acquis from
Ukrainian business sector positions
Strengths Weaknesses
- European technical assistance and financial cooperation programs;
- investment projects with the EU;
- presence of European business partners and established trade links
with the EU.
- low conversance of domestic entrepreneurs with
structural features and functioning of new quality
infrastructure;
- unstable or unsatisfactory financial and
economic situation;
- lack of motivation of the implementation of EU
technical regulations as a result of the absence of
any guarantees of Ukraine's future membership in
the EU and establishing of certain preconditions
for such membership
Opportunities Threats
- simplification of procedures for conformity assessment
and for simple products with low risk;
- reducing the number of inspections and documents for controllers;
- uniform and consistent product requirements;
- improving access to the EU market and markets of other countries
(without additional certification);
- access to participation in EU public procurement;
- acceleration of procedures and reducing the cost of standardization,
metrology, accreditation services as a result of competition between
public and private quality infrastructure;
- growth of economic efficiency (labor productivity, capital
productivity, etc.);
- the possibility of business development in the field of conformity
assessment
- high cost of standardization, metrology,
accreditation services ;
- loss of markets in the Single economic space,
especially of Russia Federation (blocking of
Ukrainian import);
- corrupt practices and ignoration of legitimate
requirements at the government quality
infrastructure end
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6. SWOT-analysis of the harmonization of technical requirements for trade with the EU acquis from
Ukrainian consumers positions
Strengths Weaknesses
- high level of consumers’ interest in protecting their
rights, which forms an active civil position to improve
the effectiveness of consumer protection as a special area
of public interest;
- availability of an active network of non-governmental
consumer organizations;
- introducing elements of consumer knowledge in the
education system
- low conversance of domestic consumers with their
rights and protection order in case of purchase of
products with defects;
- low purchasing power;
- lack of government support for consumer
organizations;
- moratorium on inspections of business entities to reply
the complainant's issues of State Inspectorate of Ukraine
on protection of consumer rights
Opportunities Threats
- improving the safety of goods and services;
- improving public health;
- reduction of injuries from defective products;
- decreasing of consumer spending by reducing of
unnecessary costs for business;
- diversification of imported products at lower prices;
- consumers empowering (replacing goods after
agreement, post-agreement compensation, collective
claims, claims of consumer organizations);
- increasing of environmental friendliness of production
and products
- higher prices of domestic products due to the inclusion
of costs of standardization, metrology, accreditation to
the cost of production;
- disappearance from the market of cheap price segment
products that do not meet the quality requirements;
- increasing of cheap, low-quality products’ quotient of
European origin, that have no sale in the EU, in domestic
food market
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7. SWOT-analysis of the harmonization of technical requirements for trade with
the EU acquis from Ukrainian government position
Strengths Weaknesses
- lasting experience in reforming the
system of technical regulation;
- ongoing cooperation with the EU in
building of new quality infrastructure;
- adoption of the Strategy of
development of technical regulations
for the period until 2020
- implementation of the Sector Policy
Support Programme “Promoting
mutual trade by removing technical
barriers to trade between Ukraine and
the European Union” (the European
Commission programme by which
financial support is provided to the
Government of Ukraine for the
implementation of reforms in the
sphere of technical Regulation)
- lack of experience in institutional support of implementation of post-
market control of quality and safety of products;
- lack of effective coordination mechanism at the highest level, at least at
the level of prime minister, and the related lack of political attention to
important details of reforming quality infrastructure;
- conservative thinking of civil servants, especially lawyers;
- lack of independent personnel policy;
- low motivation and flexibility of civil servants responsible for the
implementation of technical regulations modeled after the EU;
- unsatisfactory quality of management of the state budget, including
transferred within the EU budget support programme;
- the lack of an effective system of monitoring changes in EU legislation;
- low level of knowledge of EU languages and low quality of professional​​
translation of EU legislation
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8. SWOT-analysis of the harmonization of technical requirements for trade with the EU acquis
from Ukrainian government position
Opportunities Threats
- complete membership of Ukraine in the
European market surveillance system;
- full recognition of Ukrainian institutions
belonging to quality infrastructure;
- increasing of regulatory transparency and
reducing opportunities for corruption;
- creation of favorable investment and
regulatory climate;
- general improvement of public administration;
- increasing of economic and social efficiency
indicators;
- growing of high value added export;
- enhancing innovation in the country;
- acceleration of industrial production’s
modernization through the use of scientific and
technological achievements of European
countries;
- improving the competitiveness of products and
the economy in whole
- rising of unemployment and reducing incomes
by decreasing production of uncompetitive entities;
- increasing of workforce motivation to emigrate;
- negative pressure on the trade balance due to faster
growth of import;
- reduction of budget revenue due to curtailment of non-
competitive domestic industries.
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9. Thank you for attention!

10. Thank you for attention!