UK businesses and public sector organizations will have enhanced and more cost-effective access to IT skills, products, and services from Ukraine with the launch of the UK-Ukraine Digital Trade Agreement (DTA).
This digital trade deal officially took effect on September 1, 2024, with the UK’s Department of Business and Trade highlighting it as one of the first agreements of its kind that is entirely digital. Ukrainian tech firms are poised to provide UK organizations with IT outsourcing services, along with products and services focused on artificial intelligence and mobile applications. In return, the UK can assist Ukraine in its transition to a digital economy, promoting recovery amid the ongoing conflict with Russia.
The IT services sector plays a crucial role in Ukraine’s export revenue, with several Ukrainian IT and software development companies already catering to major businesses in the UK and other Western nations. Notably, this sector has shown resilience and continued growth despite the significant disruptions caused by the war.
In March of the previous year, the UK and Ukrainian governments signed the Digital Trade Agreement (DTA), which allows for tariff-free imports from Ukraine.
Jonathan Reynolds, the Business and Trade Secretary, remarked that this modernized trade relationship represents one of the first digital-only agreements globally: “Enhanced digitization of the economy is vital for supporting Ukraine’s economy and their fight for independence. Our government is committed to standing firm in its support for Ukraine and its people.”
The trade in goods and services between the UK and Ukraine amounted to £1.6 billion in the year leading up to the end of the first quarter of 2024.
Mark Lewis, an expert in IT outsourcing law at Stephenson Harwood, noted that other governments could gain insights from “Ukraine’s application of digital technology, communications, and both offensive and defensive cyber warfare”. He cautioned that despite the considerable talent pool in Ukraine, outsourcing IT services can be a complex decision for UK organizations due to various challenges and risks involved.
Yulia Svyrydenko, Ukraine’s first deputy prime minister, expressed gratitude for the unprecedented support from the UK, stating: “We have felt this support from the very first days of the full-scale war. The digital trade agreement between our countries is a clear sign of solidarity and backing.”
She elaborated that the implementation of this agreement will enhance Ukraine’s integration into global supply chains, spur the growth of small and medium-sized enterprises, ensure unrestricted access for Ukrainian IT companies to UK digital markets, and provide essential support to the economy both during the war and in the post-war reconstruction phase.
The agreement, with its emphasis on emerging technologies and regulatory cooperation, was welcomed by TechUK, the UK IT trade association. Sabina Ciofu, associate director of international policy and trade at TechUK, expressed enthusiasm about collaborating with their counterpart, IT Ukraine, and both governments to fulfill the commitments outlined in the agreement, particularly regarding regulatory cooperation and emerging technologies.