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Poland and Ukraine have signed a memorandum of co-operation to build the Via Carpatia, an ancient route connecting the Baltic Sea and the Aegean Sea.

The agreement was signed this week by Poland’s infrastructure and construction minister Andrzej Adamczyk and his Ukrainian counterpart Volodymyr Omelyan.

The new road aims to connect Central and Eastern Europe with the ambition of eventually joining to the Trans-European Transport Network (TEN-T) – a network of roads, railway lines, inland waterways, seaports, and airports throughout the European Union.

It is planned to run from the Lithuanian cities of Klaipeda and Kaunas via Poland’s Białystok, Lublin and Rzeszów, to Kosice in Slovakia and Debrecen in Hungary and further on to Romania, Bulgaria and Greece. The route will stretch all the way to the Romanian port of Constanţa on the Black Sea and the Greek port of Salonika in the Aegean Sea.

The idea was first launched in Poland in 2006. The route has been promoted as being an enabler of trade and supporting the development of local SMEs. It will also help countries along the route co-operate in the areas of research and science and bring about the development of technology parks and industrial parks.

“The Via Carpatia project has great significance in terms of fostering cross-border co-operation and opening up new supply chains,” Piotr Soroczynski, chief economist at Polish export credit agency Kuke, tells GTR.

“The project will boost trade in the fast-moving consumer goods (FMCG) sector which currently, due to logistics, are limited to short distance trade – crossing only one or two borders. By providing new and easily accessible land connections, Via Carpatia should also noticeably boost the tourist industry in the region. This, in turn, may also help to foster business co-operation between smaller companies in the region.”

The project is also expected to help facilitate trade between members of the Visegrad 4 (V4) countries – an alliance formed of Poland, Hungary, Slovakia and the Czech Republic.

The biggest import and export sectors for the V4 are automotive and electrical and mechanical equipment. These countries have increasingly become a part of the European supply chain. A study by the International Monetary Fund, Cluster Report on German-Central European Supply Chain (GCESC), shows the evolution of a GCESC since the 1990s, for manufacturing of goods for export to the rest of the world. It also highlights that the rapid expansion of bilateral trade between Germany and the V4 has led to technology transfers to V4 countries.

“Until now, mainly due to logistical preconditions, supply chains were formed on the East-West axis. Via Carpatia will allow supply chains to be created along the North-South axis, thus benefitting countries located in the proximity of the emerging transport corridor. This will particularly benefit the automotive and aviation industry, producers of electrical machinery and equipment – including household appliances – manufacturers of furniture, construction materials, textile, clothing and foodstuffs,” says Soroczynski.