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Volkov and Partners Law Firm: Ukraine sets precedent, requesting the WTO to modify duties for almost 400 products

Kyiv. December 5, 2012

United States’ and other WTO members’ concern over Ukraine’s intent to renegotiate duties, first and foremost, is rooted in the long list of tariff rates planned for discussion, considers a senior associate, and head of the International trade department with Volkov & Partners, Andrii Zablotskyi.
Commenting to “Interfax-Ukraine” information agency on Ukraine’s request to the WTO, he noted that the list provided for discussion includes 371 tariff lines and creates a precedent, which may encourage other countries to file similar requests.
Mr. Zablotskyi believes that Ukraine will hardly be able to renegotiate tariff levels on all products proposed, though the grounds for review are indisputable, and additionally, upon renegotiation, if successful, new level of duties for products of the weakest industries may be anticipated.
“Ukraine has the right to  modify import duties on specific products. This does not contradict the WTO rules, whereas Ukraine has complied with all prescribed procedures, having reserved the right according to Article XVIII of the GATT 1994 as early as on November 9, 2011,” said Mr. Zablotskyi.
According to him, Article XVIII does not restrict a number of lines for renegotiation. Consequently, it is incorrect to declare, as certain countries do, that the quantity is not equal to the volume prescribed pursuant to the WTO tariff negotiations.
“We believe, that the foregoing was declared because previously Article XVIII of the GATT 1994 has been applied to rather rarely, and mostly to revamp insignificant number of tariff rates (from 10 to 20 lines),” mentioned the lawyer.
In addition, Andri Zablotskyi underlined that, speaking in absolute numbers, Ukraine proposed to renegotiate a number of lines, which equals imports volume for USD 4 billion, and corresponds to 5% of the total imports in 2011, thus being no critical.
Reportedly, on November 30, the US Trade Representative, Ron Kirk, during the meeting with the Minister of Foreign Affairs of Ukraine, Kostyantyn Gryshchenko, said that Ukraine’s intent to renegotiate tariffs under the WTO concerned the US, because this step has no precedents and may undermine multilateral trading system.
On November 22, Head of Ukrainian Parliament, Mykola Azarov, informed that Ukraine and the WTO discuss the possibility of new terms of accession to the WTO, and in particular suggested to renegotiate 371 tariff lines.
On November 26, the WTO member-states addressed Ukraine requesting to withdraw its application for renegotiation of tariff rates.
On May 16, 2008 Ukraine became 152nd member of the WTO.
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