Recently, we started to hear reassuring statements that only accession to the WTO could save Ukrainian metallurgists from antidumping sanctions.
TALL STORIES ABOUT ACCESSION TO THE WTO AND HARSH TRUTH OF TECHNICAL POSSIBILITIES
TALL STORIES ABOUT ACCESSION TO THE WTO AND HARSH TRUTH OF TECHNICAL
POSSIBILITIES
Recently, we started to hear reassuring statements that
only accession to the WTO could save Ukrainian metallurgists from antidumping sanctions.
The necessity of Ukraine’s joining this international
organization is obvious, and this should have been done in the first years of the
country’s independence. The question as to why Ukraine has not joined the WTO earlier is
probably within the jurisdiction of the Ministry of Foreign Trade. But let us leave this
matter aside for the time being. However, it is worth considering the following aspects:
when Ukraine’s accession to the WTO will become possible and will it actually resolve
the problems of metal exports from the country.
As it is well known, accession to the WTO will require
acceptance of a big package of obligations as to trade with other WTO member, which
undoubtedly will be connected with reduction and freeze of import rates and development of
conditions for access of foreign suppliers to Ukrainian market.
It will be very complicated to define optimal level of
tariff rate protection of domestic market. This will become a very acute problem, since
competition among metal producers is growing. Many difficulties will be connected with the
requirement to harmonize Ukraine’s legislation with international trade rules.
In case Ukraine joins the WTO, no laws like the one on
economic experiment could be approved any more. According to this law, many enterprises of
mining and smelting complex were granted essential tax privileges. From the point of view
of Ukrainian lawmakers, this was a good initiative aimed at making work of enterprises of
iron and smelting complex more efficient, and which would enlarge Ukraine’s export
potential. Nevertheless, foreign competitors regarded it as an outrage against market
rules, and this led to a jump in a number of antidumping inquiries. It is difficult to
foresee all the aftereffects of suspension of the state support of coal industry and
agrarian sector, which is a must for accession to the WTO.
Russia can serve as a good illustration for legislative
complications and potential economic difficulties connected with accession to the WTO. In
1991-1995, Russia opened its internal market, but did not get any significant economic
advantages from the industrial developed countries. According to authoritative Russian
experts, the key issue, which is liberalization of rates, should be based on the
country’s own plans for economic reforms. The liberalization should be carried out
slowly step-by-step within 5-7 years. Over this period, restructuring of economy must be
completed, steady rate of economic growth should be achieved, budget revenues should be
stabilized, etc.
Taking into consideration all the aforementioned factors,
Ukraine would be able to join the WTO not earlier than in 8-10 years. However, it would
become possible only provided that certain steps are undertaken.
But let us imagine what would happen if the hopes of
Ukrainian metallurgists become true and Ukraine joins the WTO. They would probably face
bitter disappointment as soon as by the end of the first week of Ukraine’s membership. A
series of arguments can be mentioned to prove this possibility, including a large number
of antidumping conflicts between the WTO member-countries. They would discover that
accession to the WTO is a necessary, but not the last step on the way to access to the
world market, and there are many other additional competition restrictive practices. So,
in order to open this door, one should have a key – competitive ability of the products.
Unfortunately, it looks like Ukrainian tube producers forgot about this key. The present
condition of equipment as well as of scientific & technical research at most
metallurgical plants in Ukraine proves the above statement.
COMMENTS
Vladimir TERESCHENKO, Executive Director with the Ukrainian
Association of Ferrous Metallurgic Enterprises
I would like to speak about one specific problem, which is
related to antidumping inquiries after Ukrainian-made metal products. There are a lot of
antidumping proceedings initiated against Ukrainian enterprises practically in all
countries of the world where Ukrainian-made metal products were supplied. It looks like
only the lazy one did not initiate these proceedings. Even Egypt thinks about launching
antidumping inquiries about supplies of Ukrainian metal products, as well as the countries
of South America and Southeast Asia, which usually were the most capacious sales markets
for Ukraine’s commodities. Today Europe introduced quotas on Ukrainian metal supplies to
the EU member-states. Therefore, in order to be able to resolve these problems, we would
like to conclude direct agreements on cooperation with similar associations of Europe and
America. Our Association has already sent a draft agreement to the European association of
metallurgic enterprises Eurofer. Now we are waiting for their reply. During Kiev meetings
with the heads of this organization, a certain agreements were reached as to signing the
above document. Eurofer confirmed their consent. The document is presently subject to
particular procedure of approval. The association also negotiates for its affiliation with
international institutions, so that it would be easier for Ukrainian metallurgic
enterprises to settle their problems. Hence, accession to the WTO and affiliation with
international institutions of America and Europe would give us a chance to win antidumping
procedures and trade in a civilized way on the international market.
Besides, our objective for today is not to win antidumping
proceedings, but to prevent them. I would like to stress once again that our Association
is not seeking accession to the WTO: Ukraine is going to join the WTO. Our Association is
joining the association of European metal producers Eurofer. There are different opinions
today on whether accession to the WTO is a positive event or not. The moment will come
when we are forced to open our market to imports of Western goods in Ukraine – tax-free,
duty-free, etc., as well as to exports of Ukrainian products to these countries. In this
regard, we should remember that even between the WTO member-countries there often arise
disputes on mutual supplies of certain products to certain countries.
It may well be true that problems will not disappear with
Ukraine’s accession to the WTO. They might just start then.