For Ukraine, integration into the EU’s DSM is a tool for deepening its economic integration into the EU’s internal market, as well as facilitating the digitalization of Ukraine in accordance with European and international standards. It involves expansion of the mutual access to online markets and digital services, as well as Ukraine’s application of the EU’s common rules, standards and procedures in the digital sphere, including those concerning registration of electronic contracts, electronic payments and settlements, distribution of digital content, copyright registration, provision of cross-border digital services, protection of consumer rights on the internet etc.
This study quantifies the potential economic benefits of Ukraine’s integration into the EU’s DSM, which includes two main channels of influence – i. e. regulatory approximation in the digital sphere between Ukraine and the EU, which will reduce regulatory restrictions on digital trade between Ukraine and the EU, and acceleration of digital transformation in Ukraine.
For the purposes of this study, we calculated a Composite Digitalization Index and Digital Services Trade Restrictiveness Index for Ukraine for 2016-2018.
The results of the calculation of the Digitalization Index show that the current level of digital development in Ukraine is far below the EU average. Ukraine also lags behind the new EU Member States, which have a lower level of economic and digital development compared to the other EU countries. In addition, it was discovered that the level of digital services trade restrictiveness in Ukraine is much higher than the EU average. The regulatory differences in the digital sphere between Ukraine and the EU increase the cost of cross-border digital transactions between countries.
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Pavlo Iavorskyi
Svitlana Taran Oleksandr Shepotylo Oleksiї Hamaniuk
Trade+ International Trade Research Centre at the Kyiv School of Economics Ukrainian Centre for European Policy
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