Ukraine's Foreign Trade Policy: An Assessment of the Consequences of the War and the Formation of Strategic Development Directions
Ukraine's Foreign Trade Policy: An Assessment of the Consequences of the War and the Formation of Strategic Development Directions

Summary/Abstract: Ukraine's external trade represents a key instrument for shaping and implementing international policy. The ongoing war has altered the trajectory of external trade development, leading to changes in the operating conditions for domestic economic entities. The aim of this research is to identify shifts in the structure of Ukraine's external trade in goods and to develop strategic directions for the external trade policy that align with the new wartime conditions in the country. To achieve this goal, the following methods were utilised: historical and logical analysis; statistical analysis based on the Revealed Comparative Advantage (RCA) index; along with deductive and inductive methods. The RCA was calculated for major product groups - agricultural products, fuels and mining, textiles, metals, and machinery - for 2021-2022, using data from the World Bank, the WTO, and the State Statistics Service of Ukraine. The results indicated that Ukraine retained strong comparative advantages in agricultural products (RCA = 5.29) and non-ferrous metals (RCA = 2.17), whereas other product groups such as machinery, textiles, and fuels exhibited RCA values below 1, reflecting reduced competitiveness under wartime conditions. The study substantiates the challenges encountered in the formulation and implementation of Ukraine's foreign trade policy resulting from the Russian invasion of Ukrainian territory. Although the analysis confirms both structural and geographical shifts in trade, it does not establish a direct causal link between wartime events and RCA variation, as the indicator reflects relative export performance rather than causality. An assessment of war-related consequences was conducted, revealing a reduction in the volumes of both exports and imports across almost all product groups, as well as a shift in global trade shares in favour of trade with EU countries. Based on the statistical and RCA analysis, a model of strategic directions for the formation and development of Ukraine's foreign trade policy was developed. The model integrates institutional, legal, and sectoral mechanisms designed to support priority sectors including agriculture, metallurgy, and extractive industries, and also to increase the share of high-value-added exports, optimise imports, and strengthen integration with EU markets. This approach strengthens the coherence between empirical analysis and policy recommendations, providing a framework for restoring Ukraine's foreign trade potential and supporting post-war economic recovery and sustainable reconstruction.

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