he geographic orientation of Ukraine's foreign trade policy has considerably changed over the past few years. This process was predominantly uncontrolled in nature. Trade flows have gradually changed their course from post-Soviet countries to other regions. Thus, for example, the share of CIS countries in Ukraine's commodity export has practically halved compared with 1992 (see Chart three) [Omitted: chart three showing change in the geographic pattern of exports over 1992-99].
In 1999, the main non-CIS importers of Ukrainian goods were China (6.3 per cent), Turkey (5.8 per cent), Germany (4.8 per cent) and Italy (4 per cent). In the 1996-99 period, the volumes of Ukrainian goods supplied to these countries were gradually growing.

sharp drop - below 50 per cent - in export has happened in the Russian (by 3.2bn dollars) and Belarusian (by 377m dollars) sectors. The trade balance with FSU countries is negative while it is positive and on the rise with other countries. However, the positive aspect of this situation should not be exaggerated because the decrease in the negative balance of trade in goods was reached due to the rate of import shrinking more than that of the export increase. So, there is not much reason for optimism. Moreover, as was said above, a considerable portion of hard currency revenues from the sale of Ukrainian goods on Western markets is used to pay for Russian energy supplies. In addition, Russian accounts for about 50 per cent of Ukraine's imports. Thus, Ukraine's economy retains its critical dependence on internal processes in a neighbouring state. Therefore, there is a point in diversifying the sources of import.

n the past four years, a stable group of Ukraine's trade partners has taken shape, which consume over 50 per cent of its export; here belong Russia, China, Turkey, Germany, Italy, the USA, Belarus and Poland. Russia and China hold the lead with imports of Ukrainian goods worth 2.4bn dollars and 730m dollars, respectively, in 1999.

n insignificant export increase of 582m dollar to EU countries and the USA has only partly compensated for the 3.2bn dollar drop in export to Russia. It is curious enough that, despite the vociferous manifestations of political friendship between Kiev and Warsaw, there is a visible shrinkage in Ukraine's presence on Polish markets, with exports dropping 16.9 per cent over three years. Thus, the years of independence have seen a significant diversification of Ukrainian export, which, on the whole, is a positive factor. However, the reduction in exports to CIS countries, first and foremost Russia, has failed to be compensated for by building up exports to new markets.