The digital trade agreement will be designed to support Ukrainian businesses by cutting red tape and helping them to trade with the UK more efficiently through technologies such as electronic transactions, e-signatures, and e-contracts.
It will also aim to make it easier for UK companies to work with Ukrainian businesses and support their economic recovery.
The talks began on Tuesday, as International Trade Secretary Anne-Marie Trevelyan met with first deputy prime minister and minister of economy of Ukraine Yuliia Svyrydenko and vice prime minister and minister of digital transformation of Ukraine Mykhailo Fedorov virtually and Ukrainian ambassador to the UK Vadym Prystaiko in person in London.
Total trade between the UK and Ukraine was worth £1.9 billion in 2021 and UK exports of digitally delivered services accounted for 73 per cent of all UK services exports to Ukraine in 2020.
Ms Trevelyan said: “(Vladimir) Putin’s brutal and unprovoked invasion of Ukraine has had devastating human consequences.
“The UK stands shoulder to shoulder with Ukraine and will use trade as a force for good to help the country rebuild its modern economy after this barbaric war.
“Our partnership with Ukraine will help them seize the brighter days ahead, and we will continue to do everything in our power to protect Ukrainian jobs, livelihoods and families.”
Mr Prystaiko insisted “the ties between our governments have never been closer”, adding: “While we fight fearlessly for the freedom of our nation, many Ukrainians also look ahead to how we will rebuild our country.
“Strengthening our economic ties through this landmark digital trade agreement will support our IT industry, which is set to become a major driver of economic growth for our businesses and cities.”
The announcement comes after a direct request from President (Volodymyr) Zelensky’s government, which identified supporting the digital economy as one of its areas of focus for the recovery and reconstruction of the country.
It also follows the UK’s removal of all tariffs under the existing UK-Ukraine free trade agreement in May, supporting Ukrainian businesses and producers to export goods and rebuild their economy.
In July, the Trade Secretary also launched a new UK-Ukraine Infrastructure Taskforce, which is building partnerships between UK and Ukrainian businesses to help repair damaged and destroyed infrastructure including bridges and homes in and around Kyiv.
It comes as Ukraine marks 31 years since it declared independence from the Soviet Union. Events are planned across the UK to mark the occasion in a gesture of solidarity, as war continues to rage in the eastern European country.
Wednesday also marks six months since the Russian invasion.