Ukraine does not intend to synchronize its WTO entry with that of Russia, First Vice Premier Mykola Azarov said in an interview with the BBC Ukrainian service. Perhaps this marks the end of the strange story of Russia’s intent to obstruct Ukraine’s WTO accession early next year. The thing is that as a member of the international free trade club, Ukraine will be able to officially make its own trade demands of Russia, in particular, a demand to lift its prohibitive duty on agricultural and metallurgical products. Unless it meets these demands, Moscow can forget about WTO membership altogether. Thus, Ukraine has a chance to shed its vassal status and, in a sense, help its strategic partner move closer toward free trade. The experts are confident that Ukraine is moving toward the WTO faster than Russia.
Today the Ministry of the Economy is completing bilateral talks on trade regimes with WTO members and simultaneously preparing an exhaustive report. After studying the report, the WTO leadership will make its final decision. Moldova has advanced the most claims against Ukraine. It has joined the WTO only recently and is now actively trying to squeeze all it can out of its newly acquired status. Most probably, Kyiv will have to concede to Chisinau’s demands by granting it more access to its sugar, alcohol, and transportation services markets. Incidentally, Poland and Australia demand that Ukraine cancel the minimum price for sugar and raise raw sugar import quotas. Thus, the government is in for some tough negotiations with the parliament and agrarian interests.
According to an unwritten WTO rule, if a prospective member has received the blessing of the big four, meaning the US, EU, Canada, and Japan, whatever differences remain with other negotiators will not take long to work out. Brussels and Toronto have already supported Ukraine’s WTO accession. Tokyo’s only demand is that Ukraine cancel the requirement for certification of video equipment imported into Ukraine. Washington has two issues to solve with Kyiv — chicken imports from the US and pirate CDs from Ukraine. According to Cecilia Klein, chief WTO expert with the Office of the US Trade Representative, the drumsticks issue can be considered closed because the Americans have agreed to provide a special certificate for each consignment confirming that chickens have been raised without antibiotics banned in Ukraine. As for bootleg CDs, the US has obtained information confirming that pirate CDs sold in Ukraine are in fact produced in Russia. Thus, Ukraine only needs to strengthen its border controls. In addition, Verkhovna Rada is expected to enact the basic legislation on WTO accession. Cecilia Klein stressed that today Ukraine is much closer to the WTO than Russia. In this connection, she was utterly surprised to learn from The Day correspondent about the possibilities of Kyiv’s and Moscow’s synchronized WTO entry.
Meanwhile, Russia has yet to experience the major hurdles on its way to the WTO connected with the flourishing media piracy on its territory. The International Association for the Protection of Intellectual Property Rights and Copyrights has started collecting information on the scope of Russian piracy. Simultaneously it is preparing requirements for amendments to Russia’s piracy legislation. Unless the association makes a positive conclusion concerning the prospective WTO member, the US will not hand down its verdict on the country in question. Moreover, Washington and Brussels continue to demand that Moscow raise its domestic prices for oil and natural gas. Western experts claim that Russian producers buying oil and gas at a fraction of EU prices have unfair advantages over foreign competitors. It should be also stressed that despite last year’s food deficit Russia turned down WTO proposals to bring tariffs for imported agricultural products down to universally accepted levels. In general, on its way to the WTO Russia is yet to solve much of what Ukraine has already behind it.
It appears that for this very reason Valery Pyatnytsky, state secretary in the Ministry of the Economy, turned down the request of a Russian governmental delegation for information on protocols Ukraine has signed with the WTO. According to him, “At present, we are not coordinating our stands with Russia on our WTO accession. Such a coordination is impossible in principle. The two countries have fundamentally different trade legislation and economic structures. In Russia everything rests on the margin between domestic and export prices for oil and gas. Here the situation is completely different.” He further stated that by yearend Ukraine will complete all the formalities connected with its WTO entry and will await the session of the WTO General Council slated for early next year.
First Vice Premier Mykola Azarov stressed that the refusal to synchronize the two countries’ WTO accession does not mean that Ukraine will take a less active part in the talks on a single economic space (SES) with Russia, Belarus, and Kazakhstan. If the Ukrainian government preserves its pragmatic stance on the SES, Kyiv has a good chance of winning on both trade fronts. Without doubt, a more active trade in both eastern and western directions is even more advantageous for Ukrainian businesses. However, it is obvious that our government must weigh and calculate the rate and extent of integration with both the WTO and SES. Experience has shown that attempts to occupy two seats at a time have often ended in painful falls. Ukraine’s major interest in the CIS and SES is a free trade zone, which has been repeatedly stressed by Pres. Kuchma, including recently in St. Petersburg. Also in St. Petersburg, an announcement was made that a free trade agreement will be signed at the future CIS summit in Yalta. If this intent proves to be empty words, as has often been the case, perhaps Ukraine had best cast off its illusions and confine its efforts to the soonest possible entry into the WTO.
