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DOI: https://doi.org/10.31617/zt.knute.2018(100)01

UDC 339.544

KALIUZHNA Nataliya,
Doctor of Economics, Associate Professor, Professor of the Department
of International Economic Relations of Kiev National University of Trade and Economics
 
STOROZHCHUK Volodymyr,
Post-graduate student of the Department of International Economic Relations
of Kiev National University of Trade and Economics 

UKRAINE IN THE SYSTEM OF DIAGONAL CUMULATION PAN-EURO-MED 

Background. The accession of Ukraine to the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin (Pan-Euro-Med Convention) opens new possibilities for the country to join the regional and global value-added chains. A prerequisite for using the benefits of diagonal cumulation is the necessity for Ukraine to conclude free trade area agreements with those parties to the Convention, which will benefit from preferential trade and cumulation.
The review of scientific sources. Many domestic scientists have considered the theoretical principles of the use of preferential rules of origin as an instrument of forming trade cumulative chains between foreign trade partners. However, despite the importance of Ukraine’s joining to the Pan-Euro-Med Convention in the context of realization its foreign trade potential, the amount of scientific research in this area is very limited.
The aim of the article is to study the potential of Ukraine's accession to the system of diagonal cumulation Pan-Euro-Med.
Materials and methods. Methods of analysis and synthesis are used to systematize measures taken by Ukraine and other Parties of the Pan-Euro-Med Convention in order to fully utilize the potential of a single cumulation zone; matrix method – to formalize the conditions for the use of diagonal cumulation between the Parties to the Pan-Euro-Med Convention. The research was performed on the materials of the World Trade Organization and the State Fiscal Service of Ukraine.
Results. In order to formalize the conditions for the use of diagonal cumulation between Ukraine and other Parties to the Convention, a diagonal cumulation matrix Pan-Euro-Med has been developed. The matrix records the existence or absence of agreements with identical preferential rules of origin between the Parties to the Convention. It is determined that the maximum effectiveness of the diagonal cumulation Pan-Euro-Med is ensured in the case that agreements with identical preferential rules of origin are concluded between all the Parties to the Convention. The criteria for ensuring the effectiveness of Ukraine's participation in the Pan-Euro-Med Convention is substantiated. The criteria provides the maximization of the number of agreements with identical preferential rules of origin between Ukraine and other Parties to the Convention. The measures taken by Ukraine and other Parties to the Pan-Euro-Med Convention for full using the potential of this agreement are analyzed. The systematization of these measures is carried out according to the following criteria: the subject of implementation; mechanism of implementation; the purpose of the implementation; aspect of implementation (organizational or methodical).
Conclusion. As a result of Ukraine's conclusion of bilateral free trade agreements with identical rules of origin of goods with other Parties to the Convention, trade procedures will be simplified, the use of the country's export potential will be increased, and economic integration with the European Union will be strengthened.
 
Keywords: Pan-Euro-Med Convention, preferential rules of origin, diagonal cumulation, preferential duty rates.

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