The unblocking of the Ukrainian seaports is vital for protecting the U.S. economic interests in the Black Sea region. This will create new opportunities for intensifying bilateral trade between the United States and Ukraine in several areas including hi-tech and metallurgy. Such a conclusion was revealed by the analysts of the Kyiv-based Centre for Transport Strategies (CFTS) after scrutinising the databases of the key Ukrainian industry associations.
The restoration of the full operation of the Ukrainian seaports, which is being actively discussed in the European and North American media, is mostly related to grain transportation from Ukraine to the African states. Meanwhile, the issue may have a broader effect on the economy of both Ukraine and the Black Sea region. "The full opening of ports in Ukraine can create new opportunities for the expansion of mutually beneficial foreign trade between the United States and Ukraine," the CFTS analysts, the Kyiv-based transport-dedicated think tank, sum up in their recent study.
According to the Ukrainian institution, the economic impact of the unblocking of the Ukrainian seaports will positively affect five industries in the U.S.-Ukraine bilateral trade. The first sector is hi-tech, which has a total import potential in moving the dedicated goods from the U.S. to Ukraine of more than USD 2.3 billion per year. Currently, it is underdeveloped due to the military aggression of the Russian Federation and blocked sea routes. In 2022 the import of hi-tech goods from the U.S. to Ukraine amounted to around USD 1.3 billion.
Two other industries are agriculture and metallurgy. Current actual restrictions are provided for about 40% of exports due to the inhibition by the Russians of ship inspections in the Bosphorus. If these restrictions are eliminated, the export growth potential is about 20 million tonnes of agricultural products per year. A significant part of this volume is sold by American commodity traders (ADM, Sargill, Bunge, СHS, etc.). In terms of metallurgy, the fully operational Ukrainian seaports will allow the U.S. manufacturers to export more than 3 million tonnes of coal to Ukraine, which is necessary for the local pig iron producers. Ukraine, in its turn, will be able to export to the United States up to 3.5 million tonnes of pig iron annually.
By unblocking its seaports Ukraine will diversify its supply chains for importing oil products. Now the country imports most of the oil products from Europe by rail and road. In 2023 Marathon Petroleum Company, the American manufacturer of petroleum products, commenced exporting diesel to Ukraine. And the fifth area for boosting the U.S.-Ukraine bilateral trade is the titanium industry. The US Department of the Interior has classified titanium as one of 35 minerals vital to US economic and national security. "Strengthening cooperation with the titanium industry of Ukraine will allow to gain import dependence on raw materials from China and Russia. Titanium is used in the American defence-industrial complex," the Ukrainian experts consider.
In general, the full opening of the Ukrainian seaports will ensure the growth of the country's GDP by 10% and an increase in tax revenues to the Budget of Ukraine by USD 4 billion per year, which is important for maintaining Ukraine's defence capability and the de-occupation of Ukraine's territory. "To ensure the U.S.-Ukraine trade and protect the U.S. national interests, it is necessary to ensure the complete unblocking of ports in Ukraine and maritime commercial transportation in the Black Sea for all types of cargo," the CFTS analysts summarise.
