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Associate: Ukraine has right to restrict grain export only in case of deficit

UNIAN. Economy
September 13, 2010

Ukraine has the right to restrict grain export with no relevant measures applied by the World Trade Organization (the WTO) only in case grain is in short supply as stated to UNIAN by Associate of Volkov Koziakov and Partners ANNA GLADSHTEIN.
"Having acceded the WTO Ukraine undertook to avoid export restrictions. Any grounds for relevant measures other than the justified conclusion on the deficit of certain product shall be ruled out", said Ms. Gladshtein.
According to her, WTO Agriculture Agreement includes a possibility to impose restrictions on foodstuff export only by virtue of paragraph 2(а), Article XI of GAAT 1994, addressing to prevent or ease down sharp deficit of foodstuff or other goods being of high significance for exporting country. This was the argumentation Ukraine provided before to justify export restrictions and protection of its interests, precluding, thus, any sanctions from the WTO and its members.
Moreover, Ms. Gladshtein explained that in case of export ban or restriction subject to the said paragraph other WTO members may not take retaliatory actions against Ukraine, as in such case it is envisaged not a full export prohibition but only interim restraints governed by the exception under WTO’s rules.
Anna Gladshtein added that prior to a WTO member imposes export ban or restriction it shall submit an advance written notification to WTO Agriculture Committee, which informs about the nature and duration of such measures. Besides, the country imposing the aforesaid measures shall be assigned a commitment to carry out consultations in relation to any issue concerned with any other WTO-member (upon its request) having substantial interest as an importer.
Admittedly, Russia has introduced an interim prohibition against grain export, which will be valid until the end of 2010. Ms. GLADSHTEIN explained that unlike Ukraine, Russia is not a WTO member, and enforcement of such restrictions shouldn’t have happened in line with procedures of notification and consultation.
As UNIAN was told, Ukrainian Prime-Minister Mykola AZAROV said that grain export from Ukraine would not be restricted.
Mr. AZAROV said that the negotiations with grain traders are, currently, underway. They will set out such a schedule and volume of grain supply, as will make it possible to keep domestic market stable and not to restrict exportability.
According to preliminary data of the Ministry of Agriculture, grain exports may amount to over 3 million tons, however, to avoid a craze a supply schedule have to be agreed.
Earlier, the government discussed possible quotation of grain exports in the amount of 2.5 million tons for the period from September 1, until the end of 2010: 1,5 million tons of wheat, 1 million tons of barley and 0.01 million tons of rye.
The government forecasts that 2010 grain yield will reach 40-42 million tons vs. 46 million tons in 2009. In the current marketing year expected Ukraine’s grain export is 15-17 million tons.
Recently, the US Department of Agriculture (USDA) has cut the forecast on Ukraine’s grain yield 2010 by 6.2 million tons down to 38.75 million tons, and on exports – by 4.2 million tons down to 15 million tons.
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