Japanese-Ukrainian bilateral trade

Bilateral trade and investment cooperation was characterized by stable positive dynamics until 2022. In 2021, the total volume of bilateral trade turnover in goods and services reached $1,589.66 mln. The total turnover consisted of the export of Ukrainian goods and services - $359.89 mln, as well as the import of goods and services from Japan - $1,229.77 mln.

(mln. $)

Bilateral trade in goods in January-December 2021 reached $1,574.1 mln. This is the largest trade turnover in the last decade. The growth occurred primarily due to the almost 2-fold growth of Ukrainian exports to Japan to $347.24 mln, while Japanese imports to Ukraine increased by 14% and reached $1,226.85 mln.

Main items of export: ores and iron concentrates - 42.7% ($148.1 mln), tobacco - 23.2% ($80.7 mln), aluminum and its products - 7.7% ($26.8 mln) .), wood and wood products - 6.8% ($23.5 mln).

The main articles of import: cars - 65.0% ($797.2 mln), electrical and general engineering products - 11.4% ($139.85 mln), optical and photographic devices - 8.9% ($108.6 mln), rubber - 3.0% ($35.8 mln).

In 2022, Japanese corporations exported most of the goods from Ukraine not to Japan, but to the countries of Southeast Asia, the EU, Africa and China. The volume of such exports to other countries (except Japan) in 2021 amounted to more than $450 mln. For example, Japan Tobacco Ukraine annually exports cigarettes to 13 countries in the amount of about $115 mln.

According to the State Statistics Service of Ukraine, the bilateral trade in services in January-December 2021 increased by 8.5% and amounted to $15.57 mln. The export of services increased, compared to the same period in 2020, by 38.7% to $12.65 mln. The import of Japanese services decreased by 62.8% to $2.92 mln, which was caused by the suspension of inbound/outbound tourism in Japan, the restriction of business trips, as well as the cancellation of exhibitions and international events.

Bilateral trade of Ukraine with Japan and other countries of the world has always been carried out through the sea ports of the Black and Azov seas. From the end of February 2022, these ports ceased their activities due to russia's armed aggression against Ukraine.

As of July 2022, the State Statistics Service of Ukraine does not provide data on Ukraine's foreign trade with the countries of the world in 2022. Therefore, information on bilateral trade in goods between Ukraine and Japan for January-May 2022 was prepared on the basis of customs statistical data of the Ministry of Finance of Japan.

Mln. ¥

According to the customs statistics of the Ministry of Finance of Japan, bilateral trade turnover for 5 months of 2022 amounted to $450.77 mln and decreased by 8% compared to the same period in 2021. At the same time, according to Japanese statistics, Ukrainian exports in January-May 2022 increased by 13% compared to the 5th month of 2021 to the level of $287.02 mln, while Japanese imports during this period decreased by 30.4% to the amount of $163.75 mln. In the structure of Japanese imports, which took place practically only in the 1st quarter, 93% were cars. The structure of Ukrainian exports in January-May 2022, according to data from the Ministry of Finance of Japan, consisted of 47% of tobacco products, 30% of iron ore raw materials and 12.6% of food products.

Foreign direct investment (FDI) directly from Japan into the economy of Ukraine, according to the National Bank of Ukraine, amounted to $234.8 mln as of 12/31/2021. This FDI is concentrated mainly in the sphere of wholesale and retail trade and repair of vehicles (95% - $223,0 mln).

In addition to the $234.8 mln of investments registered by the NBU, originating from Japan, most of the Japanese investments (additionally over $550 mln) were attracted by Japanese corporations to Ukraine from other countries.

Japanese industry in Ukraine is represented by factories of the Japanese companies Yazaki (Transcarpathia region) and Fujikura (Lviv region) for the production of electrical and electronic equipment for vehicles. Investments in these enterprises are registered from the European branches of these companies, and the products of these enterprises are aimed at consumers in EU countries. Japan Tobacco Inc., which has been operating in Ukraine since 1993, invested about $320 mln in the development of a tobacco factory in Kremenchuk. These investments are registered from the Netherlands by the international corporation "Japan Tobacco International" (headquarters of JTI in Geneva).

In 2018-2021, Japanese investments were also directed to the agricultural sector of Ukraine. Sumitomo Corporation became the main shareholder of the Ukrainian Spektr-Agro JSC, which has a wide network of representative offices and enterprises in all regions of Ukraine and specializes in the supply of agricultural machinery, chemical plant protection products, fertilizers, etc. In 2019-2021, the Japanese company SDG Corp invested more than $40 mln in the Ukrainian agricultural sector for the construction of grain warehouses in the Tarascha district of Kyiv region.

In 2022, in the context of Japan's solidarity with Ukraine in opposing russian armed aggression, the Government of Japan adopted a number of decisions regarding financial assistance, which in 2022 reached more than $1.1 billion:

1. Allocation of financial support to Ukraine within the framework of "Loans for development policy in the field of emergency economic recovery" in the amount of $600 mln:

- On April 28, 2022, an Agreement (in the form of an exchange of notes) was signed in Tokyo on providing a loan to DPL in the amount of  ¥13 billion (equivalent to $100 mln);

- On June 7, 2022, an Agreement (in the form of an exchange of notes) was signed in Tokyo on amendments to the previous Agreement for an additional amount of ¥65 billion (equivalent to $500 mln).

2. Providing emergency humanitarian aid to Ukraine in the amount of $300 mln to "Ukrainians who are going through difficult times both in Ukraine and in neighboring countries." This is humanitarian aid provided through international organizations in the fields of health and medicine, food security and protection, as well as recovery support.

3. Also in Tokyo on April 28, 2022, an agreement was signed on the allocation of grant aid under the "Economic and Social Development Program" (¥300 mln) to strengthen the health care system by providing diagnostic medical equipment for 8 hospitals in Ukraine.

4. At a meeting of the Cabinet of Ministers of Japan on July 5, 2022, Prime Minister F.Kishida approved a decision to provide $200 mln in aid in response to the global food crisis caused by russia's invasion of Ukraine, which should contribute to food security, which F. Kisida announced at the G7 summit in Germany in June 2022.

During the bilateral online meetings organized by the Embassy of Ukraine in Japan in May of this year, the Japanese side was called upon to financially support Ukraine in the fight against the aggressor and to participate in the reconstruction projects of Ukraine. During the online negotiations of the First Deputy Prime Minister - Minister of Economy of Ukraine Yu. Svyridenko on 12.05.2022 with the Minister of Economy, Trade and Industry of Japan K. Hagiuda and on 27.05.2022 with the Chairman of the Ukrainian Committee of the Japan Business Federation "Keidanren", the Chairman of the Board of the Corporation "Marubeni" F. Kokubu, the Japanese side was given specific proposals for the areas of work.

It was agreed on the preparation of a government decision on the participation of Japan, together with the leading countries of the world and in cooperation with the World Bank and the IMF, in the creation of the Assembly of Donors and a special fund that will provide financing for post-war reconstruction projects of Ukraine.

During 2018-2021, projects were implemented in Ukraine under the Official Development Assistance program, some of which are being partially or completely restored as of July 2022:

- "Reconstruction of sewage treatment facilities and construction of a technological line for cleaning and disposal of precipitation at the Bortnychi Aeration Station (BAS)" with a loan of $1 billion.

- "Study of municipal solid waste management". JICA experts are preparing a study on solid waste management in three cities of Ukraine - Kharkiv, Kyiv and Dnipro.

 "Financial adviser to the Government of Japan on reforming the financial system of Ukraine for the Ministry of Finance of Ukraine."

- A project aimed at developing the potential of the public broadcaster in Ukraine.

- Project "Improvement of radiation control of the natural environment and the legislative framework in Ukraine regarding ecological rehabilitation of radioactively contaminated territories."

- Support of small and medium-sized enterprises in Ukraine on the basis of a two-stage loan in cooperation between JICA and the German-Ukrainian Foundation.

Japanese-Ukrainian bilateral trade

Bilateral trade and investment cooperation was characterized by stable positive dynamics until 2022. In 2021, the total volume of bilateral trade turnover in goods and services reached $1,589.66 mln. The total turnover consisted of the export of Ukrainian goods and services - $359.89 mln, as well as the import of goods and services from Japan - $1,229.77 mln.

(mln. $)

Bilateral trade in goods in January-December 2021 reached $1,574.1 mln. This is the largest trade turnover in the last decade. The growth occurred primarily due to the almost 2-fold growth of Ukrainian exports to Japan to $347.24 mln, while Japanese imports to Ukraine increased by 14% and reached $1,226.85 mln.

Main items of export: ores and iron concentrates - 42.7% ($302.4 mln), tobacco - 23.2% ($80.7 mln), aluminum and its products - 7.7% ($26.8 mln) .), wood and wood products - 6.8% ($23.5 mln).

The main articles of import: cars - 65.0% ($797.2 mln), electrical and general engineering products - 11.4% ($139.85 mln), optical and photographic devices - 8.9% ($108.6 mln), rubber - 3.0% ($35.8 mln).

In 2022, Japanese corporations exported most of the goods from Ukraine not to Japan, but to the countries of Southeast Asia, the EU, Africa and China. The volume of such exports to other countries (except Japan) in 2021 amounted to more than $450 mln. For example, Japan Tobacco Ukraine annually exports cigarettes to 13 countries in the amount of about $115 mln.

According to the State Statistics Service of Ukraine, the bilateral trade in services in January-December 2021 increased by 8.5% and amounted to $15.57 mln. The export of services increased, compared to the same period in 2020, by 38.7% to $12.65 mln. The import of Japanese services decreased by 62.8% to $2.92 mln, which was caused by the suspension of inbound/outbound tourism in Japan, the restriction of business trips, as well as the cancellation of exhibitions and international events.

Bilateral trade of Ukraine with Japan and other countries of the world has always been carried out through the sea ports of the Black and Azov seas. From the end of February 2022, these ports ceased their activities due to russia's armed aggression against Ukraine.

As of July 2022, the State Statistics Service of Ukraine does not provide data on Ukraine's foreign trade with the countries of the world in 2022. Therefore, information on bilateral trade in goods between Ukraine and Japan for January-May 2022 was prepared on the basis of customs statistical data of the Ministry of Finance of Japan.

Mln. ¥

According to the customs statistics of the Ministry of Finance of Japan, bilateral trade turnover for 5 months of 2022 amounted to $450.77 mln and decreased by 8% compared to the same period in 2021. At the same time, according to Japanese statistics, Ukrainian exports in January-May 2022 increased by 13% compared to the 5th month of 2021 to the level of $287.02 mln, while Japanese imports during this period decreased by 30.4% to the amount of $163.75 mln. In the structure of Japanese imports, which took place practically only in the 1st quarter, 93% were cars. The structure of Ukrainian exports in January-May 2022, according to data from the Ministry of Finance of Japan, consisted of 47% of tobacco products, 30% of iron ore raw materials and 12.6% of food products.

Foreign direct investment (FDI) directly from Japan into the economy of Ukraine, according to the National Bank of Ukraine, amounted to $234.8 mln as of 12/31/2021. This FDI is concentrated mainly in the sphere of wholesale and retail trade and repair of vehicles (95% - $223,0 mln).

In addition to the $234.8 mln of investments registered by the NBU, originating from Japan, most of the Japanese investments (additionally over $550 mln) were attracted by Japanese corporations to Ukraine from other countries.

Japanese industry in Ukraine is represented by factories of the Japanese companies Yazaki (Transcarpathia region) and Fujikura (Lviv region) for the production of electrical and electronic equipment for vehicles. Investments in these enterprises are registered from the European branches of these companies, and the products of these enterprises are aimed at consumers in EU countries. Japan Tobacco Inc., which has been operating in Ukraine since 1993, invested about $320 mln in the development of a tobacco factory in Kremenchuk. These investments are registered from the Netherlands by the international corporation "Japan Tobacco International" (headquarters of JTI in Geneva).

In 2018-2021, Japanese investments were also directed to the agricultural sector of Ukraine. Sumitomo Corporation became the main shareholder of the Ukrainian Spektr-Agro JSC, which has a wide network of representative offices and enterprises in all regions of Ukraine and specializes in the supply of agricultural machinery, chemical plant protection products, fertilizers, etc. In 2019-2021, the Japanese company SDG Corp invested more than $40 mln in the Ukrainian agricultural sector for the construction of grain warehouses in the Tarascha district of Kyiv region.

In 2022, in the context of Japan's solidarity with Ukraine in opposing russian armed aggression, the Government of Japan adopted a number of decisions regarding financial assistance, which in 2022 reached more than $1.1 billion:

1. Allocation of financial support to Ukraine within the framework of "Loans for development policy in the field of emergency economic recovery" in the amount of $600 mln:

- On April 28, 2022, an Agreement (in the form of an exchange of notes) was signed in Tokyo on providing a loan to DPL in the amount of  ¥13 billion (equivalent to $100 mln);

- On June 7, 2022, an Agreement (in the form of an exchange of notes) was signed in Tokyo on amendments to the previous Agreement for an additional amount of ¥65 billion (equivalent to $500 mln).

2. Providing emergency humanitarian aid to Ukraine in the amount of $300 mln to "Ukrainians who are going through difficult times both in Ukraine and in neighboring countries." This is humanitarian aid provided through international organizations in the fields of health and medicine, food security and protection, as well as recovery support.

3. Also in Tokyo on April 28, 2022, an agreement was signed on the allocation of grant aid under the "Economic and Social Development Program" (¥300 mln) to strengthen the health care system by providing diagnostic medical equipment for 8 hospitals in Ukraine.

4. At a meeting of the Cabinet of Ministers of Japan on July 5, 2022, Prime Minister F.Kishida approved a decision to provide $200 mln in aid in response to the global food crisis caused by russia's invasion of Ukraine, which should contribute to food security, which F. Kisida announced at the G7 summit in Germany in June 2022.

During the bilateral online meetings organized by the Embassy of Ukraine in Japan in May of this year, the Japanese side was called upon to financially support Ukraine in the fight against the aggressor and to participate in the reconstruction projects of Ukraine. During the online negotiations of the First Deputy Prime Minister - Minister of Economy of Ukraine Yu. Svyridenko on 12.05.2022 with the Minister of Economy, Trade and Industry of Japan K. Hagiuda and on 27.05.2022 with the Chairman of the Ukrainian Committee of the Japan Business Federation "Keidanren", the Chairman of the Board of the Corporation "Marubeni" F. Kokubu, the Japanese side was given specific proposals for the areas of work.

It was agreed on the preparation of a government decision on the participation of Japan, together with the leading countries of the world and in cooperation with the World Bank and the IMF, in the creation of the Assembly of Donors and a special fund that will provide financing for post-war reconstruction projects of Ukraine.

During 2018-2021, projects were implemented in Ukraine under the Official Development Assistance program, some of which are being partially or completely restored as of July 2022:

- "Reconstruction of sewage treatment facilities and construction of a technological line for cleaning and disposal of precipitation at the Bortnychi Aeration Station (BAS)" with a loan of $1 billion.

- "Study of municipal solid waste management". JICA experts are preparing a study on solid waste management in three cities of Ukraine - Kharkiv, Kyiv and Dnipro.

 "Financial adviser to the Government of Japan on reforming the financial system of Ukraine for the Ministry of Finance of Ukraine."

- A project aimed at developing the potential of the public broadcaster in Ukraine.

- Project "Improvement of radiation control of the natural environment and the legislative framework in Ukraine regarding ecological rehabilitation of radioactively contaminated territories."

- Support of small and medium-sized enterprises in Ukraine on the basis of a two-stage loan in cooperation between JICA and the German-Ukrainian Foundation.