Eurasian Integration Yearbook 2012

Customs Unionand the Single Economic Spaceaggregate GDP if they do not integrate. Over the period of 2011-2030,the total cumulative effect from the creation of the SES, without Ukraine, isestimated at $900 billion (in 2010 prices).2. Because of the existing structure of the Belarusian economy and the maindirections of its foreign economic ties, integration in the post-Soviet areais of vital importance to the country, since Belarusian exports to the SEScountries can reach up to 35% of the national GDP in the future.3. Ukraine’s avoidance of the integration processes in the post-Soviet area willlead to the preservation of its current sectoral breakdown and, as a result, toa potential slowdown in its economic growth because of the impossibilityto accelerate export growth.4. Ukraine’s joining the CIS FTA with the current exceptions will have noappreciable impact on foreign trade within the CIS, the growth rates ofthe Ukrainian economy, or the country’s economic structure. In essence,Ukraine’s joining the CIS FTA in this format can be viewed as the preservationof its status quo with insignificant positive effects for its economy.5. Ukraine’s joining the EU FTA would worsen the terms of trade in thepost-Soviet area. In this case the SES countries can mitigate the negativeconsequences of such a move by Ukraine by raising median customs tariffs.Because of a reduction in exports to the SES countries and an increase inimports from the EU (only partially offset by a certain increase in exports tothe EU), Ukraine in this scenario can lose up to 1.5% of its baseline GDP.6. The greatest change in the structure of the Ukrainian economy for thesectors with higher processing levels is expected in the scenario envisioningthe country’s joining the SES with subsequent technological convergence.In this case, the share of mechanical engineering in Ukraine’s gross outputis expected to climb from 6% to 9%.7. Ukraine joining the SES means that, owing to trade effects, its annual GDPwill exceed the baseline GDP by 1% by the end of the forecast period.With technological integration and the fostering of cooperation ties takeninto account, the economic effect can be estimated to reach 6-7% of GDPby 2030. In this scenario, by the end of the forecast period, Ukraine’s GDPis expected to exceed its GDP in the scenario avoiding integration withthe SES by approximately 6-7%. At the same time, the share of mechanicalengineering in Ukraine’s GDP is expected to increase from 6% to 9%. Inaddition, the share of machinery and equipment in Ukraine’s total output isforecasted to reach 6% by 2030 and their share in Ukraine’s exports to theSES 20%. The fostering of cooperation in aircraft manufacturing will boostturnover in this sector. In the structure of Ukrainian exports to the SES, theshare of aircraft equipment is expected to grow to 7% by 2030. The shareof shipbuilding products in Ukrainian exports to the SES is forecasted to40 EDB Eurasian Integration Yearbook 2012