DCFTA between Moldova and EU after one year

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Publishing date: Friday, 04 December 2015
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Key Messages

  • September 2015 marked one year since the implementation of DCFTA (Deep & Comprehensive Free Trade Agreement) between Moldova and EU began, and its results were overshadowed by the country’s economic and political problems, says a report published by Independent Think-Tank Expert-Grup, author Ana Popa.
  • The evolution of exports to the UE is much more stable compared to other regions. While the total amount of Moldovan exports decreased by 14.8% during August 2014 – September 2015 compared to the same period last year, than exports to EU fell by just 1.4%. Moreover, contrary to the belief of Eurosceptics, agri-food exports to EU increased by 10.8%, thus partially offsetting the decline of exports to other destinations, mainly those bound to Russia, where the decline reached 73%.
  • The increase of exports of the duty-free’ products beat expectations, and in the case of grapes, plums and barley, the exports increased five-fold. However, exports of industrial non-food products to UE diminished with 6.9% - though a significantly lower rate compared to reduction in CIS and other countries. The UE has also strengthened its position as Moldova’s main trading partner in terms of exports, with its share increasing from 51% before DCFTA implementation to 59% after one year of implementation.
  • Besides the increased amount of Moldovan exports to EU, our products have identified new markets: Spain, Sweden, Bulgaria – for grapes, Bulgaria and Sweden – for apples, Czech Republic  - for grain, Cyprus, Greece and Latvia for barley, Latvia – sugar.
  • Despite fears that DCFTA implementation would trigger an „invasion” of EU products to Moldova, EU imports to our country in fact decreased by 16.4% - albeit this has also been determined by stagnant domestic demand caused by national currency depreciation, which triggered an price spike for import goods, and also by a surplus of domestic production previously banned on the Russian market.
  • The DCFTA’s initial short-term effects for trade have been positive for Moldova. But in order to take full advantage of its provisions on medium and long term, Moldova must continue to undertake major efforts in fully implementing the recommendations from Association Agenda, in finalizing institutional reform in the field of food safety and also it must identify new markets within EU for its products.

Also read the press release.

 

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This publication is produced within the project “Understanding the EU’s Association Agreements and Deep and Comprehensive Free Trade Areas (DCFTAs) with Ukraine, Moldova and Georgia”, led by Centre for European Policy Studies (CEPS) in Brussels, in partnership with Expert-Grup (Moldova), Institute for Economic Research and Policy Consulting (Ukraine) and Reformatics (Georgia), with the financial support of the Swedish International Development Cooperation Agency (SIDA). Opinions expressed in this document belong to the authors and do not necessarily reflect the opinions of CEPS and SIDA.

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