Foreign economic relations of Ukraine with the European Union: geographical dimension and current challenges

Abstract

The article analyzes the indicators of Ukraine's exports and imports with the countries of the European Union. The balance of Ukraine's foreign trade with the EU countries is calculated and analyzed. 

The aim of the study is a geospatial analysis of Ukraine's foreign economic cooperation with the EU countries for the period from 2022 to 2024.

The study found that the EU is a strategically important trading partner of Ukraine, accounting for about 60% of domestic exports in 2024. This fact indicates a high level of Ukraine's economic integration into the promising European space, which has been shaping up over the past decade and has been strengthened by geopolitical events since 2014. Imports of goods from the EU have exceeded exports for most years, but in 2022, exports from Ukraine to the EU began to exceed imports. This break in the dynamics occurred against the backdrop of Russia's full-scale invasion, which became a catalyst for trade liberalization by the European Union: in 2022, duties and quotas for Ukrainian goods were temporarily abolished. The commodity structure of Ukraine's exports to the EU shows a predominance of agricultural products (grains, oilseeds), fats and oils, as well as metals and electrical equipment. Imports from the EU, in turn, consist mainly of mineral fuels, machinery, chemicals, and vehicles. This structure demonstrates the complementarity of the economies of Ukraine and the European Union. Regionally, Ukraine's largest European trading partners have traditionally been Germany and Poland, which account for the largest volumes of imports and exports. At the same time, there is a negative trend of a decrease in the trade surplus with the countries of Southern and Eastern Europe, which is a consequence of military aggression and logistics complications. Investments from EU countries in Ukraine in 2022-24 show steady growth despite the difficult conditions of war. The EU is one of the key sources of funding, combining public support with private investment. In 2024, the largest amounts of foreign direct investment came from such EU countries as the Netherlands ($1.19 billion), Cyprus ($1.13 billion), Luxembourg ($284.5 million), Austria ($276.8 million), France ($263.7 million), Poland ($191.6 million), Switzerland ($189.2 million), and others.

Consequently, Ukraine's foreign economic cooperation with the EU countries remains one of the key factors in the stability and development of the national economy.