Ukraine and the EU signed an agreement on "transport visa-free". What does it mean?

The agreement on cargo transportation by motor vehicle cancels the need to obtain permits for the ' transportation by Ukrainian carriers and allows to avoid stopping the export of Ukrainian products through automobile checkpoints. The term of the agreement is 1 year with the possibility of extension and it t come into force on June 29.

 

In addition, from now on, Ukrainian driver's licenses are fully recognized in the EU. It is important for those Ukrainians who have old-style driver's licenses.

These decisions are really important in terms of reorientation of logistics to the western borders. With the start of a full-scale war and the blockade of Ukrainian ports, the volume of exports by road transport increased several times. Accordingly, the need for permits for international transportation has also increased. Now such permissions are not required. This will save time on bureaucratic procedures and also save a lot of money that some countries (for example, Hungary) required for issuing permits.

 

The "transport visa-free" agreement together with the EU decision to cancel customs duties and tariffs on Ukrainian goods (we wrote about this earlier: https://bit.ly/3uoJ774) save our business tens of millions of dollars and open up new opportunities for Ukrainian products in European markets. In the long term, such a decision will help increase the competitiveness of Ukrainian companies, update the car fleet to European standards, reduce the outflow of drivers abroad, and stimulate the authorities to expand the border infrastructure.

 

The Ministry of Infrastructure predicts that in the near future the volume of cargo transportation will increase by 5-7 times compared to the pre-war period. And these are additional funds that will significantly contribute to the post-war economic reconstruction.

Ukraine was among the first non-EU countries with which the European Union concluded such an agreement. Negotiations on the signing of a similar document between the EU and Moldova are currently underway.

 

Ukraine has been moving towards signing a transport visa for about 10-15 years, especially after 2016, with the signing of the Association Agreement with the EU.

Since 2014, the volume of cargo transportation to the countries of the European Union by cars has increased by 42%. However, the situation with international transportation has always been the subject of negotiations between the Ukrainian and European delegations. The fact is that Ukrainians could carry out all international road freight transportation only with special permits. The number of such permits was always limited. And the scale of this problem was growing fastly. For example, in 2021, foreign countries transferred only 850,000 permits. This means that Ukrainian carriers could cross the border with other states only this amount of times. This was not enough to meet transportation needs. And as a result, low competitiveness of Ukrainian companies, an increase in the level of corruption in these areas, a low level of employment of hired personnel, and an exodus of drivers to the EU. According to the estimates of the German-Ukrainian Chamber of Commerce and Industry, since 2018 Ukraine has lost about 500 million euros due to a lack of permits.

In the last year, the situation with the issuance of permits to Ukrainian motor carriers has significantly worsened and required settlement. Therefore, the adoption of such a decision is not only a powerful step for the further European integration of Ukraine, but also an important support for our economy and post-war reconstruction.