EMPIRICAL STUDY OF PREFERENTIAL ARRANGEMENTS IMPACT ON UKRAINE’S EXTERNAL TRADE

Abstract

The article has the purpose to conduct formal quantitative analysis of Ukraine’s
bilateral trade to find out the significance and direction of impact of preferential
trade arrangements on Ukraine’s external trade. The methodology of the study com-
prises regression analysis of gravity model of bilateral trade with dummy variables
controlling for the following preferential trade arrangements – free trade area, Gen-
eral System of Preferences, World Trade Organization membership. While free trade
areas and GSP regimes are found to have positive impact on Ukraine’s external
trade development, the estimated regression showed no positive influence of WTO
membership on Ukraine’s bilateral trade in 2008-2009.  Limitations of the conducted
analysis and economic policy implications are also discussed.