Over the past two years, Ukrainian metallurgy augmented its output and imports, whereas exports of Ukraine-made metal products were negatively affected by a number of factors.



Andrey ERMAK, director general of ILC company

Over the past two years, Ukrainian metallurgy augmented
its output and imports, whereas exports of Ukraine-made metal products were negatively
affected by a number of factors.

In December 2000, the US Department of Commerce proposed
Ukraine to sign the Uniform Steel Agreement, similar to the agreement between the USA and
Russia in 1999. Representatives of Ukraine’s State Committee for Industrial Policy note
that such an agreement will replace numerous acts regulating export supplies from Ukraine
to the USA and embrace such items as HR and CR steel, reinforcing steel, wire rod, and
tubes. Along with this, the USA proposed to suspend the antidumping inquiry into Ukrainian
HR steel.

As compared to Russia, the USA deliberately compels Ukraine
to adhere to the same scheme of partnership and, thus, Ukraine should take into account
the implications of the Russian-American relations. The American market for metal products
is likely to become non-accessible for Russian exports. Antidumping inquiries initiated
five years ago as regards Russia-made steel seem to be the first step towards the complete
removal of Russian products from the US market. An investigation on HR sheets and plates
resulted in a twofold reduction of annual quotas for Russian exporters, whereas according
to the signed agreement, Russia acknowledged the status of a non-market economy. As a
result, from then on, Russian enterprises cannot assert their rights in the USA
independently and have to appeal to the Russian government instead.

At the same time, Russia and the USA concluded the Uniform
Steel Agreement, which suspended all antidumping inquiries against Russia. The Agreement
made provision for all types of metal products exported from Russia and set quotas at the
1997’s level thus limiting the export to the figures reported in the year when Russian
manufacturers just entered the US market.

Since the USA proposed Ukraine to seal the same uniform
agreement, Ukraine should avoid mistakes made by Russia. For instance, pursuant to the
agreement concluded with Russia, the USA has the right to initiate further antidumping
inquiries and bears no responsibility as concerns such investigations. Besides, there are
no guarantees that announced quotas will remain unaltered. In 2000, Russia failed to
introduce necessary amendments and thus was trying to break the agreement. Besides, in the
near future, Russia hopes to become a WTO member, which will automatically give it the
status of a country with market economy and enable it to initiate a revision of the signed

Thus, the status of a country with a market economy is a
point of paramount importance for Ukraine. To win antidumping cases and avoid restricting
measures, Ukrainian enterprises will have to prove the market foundations of the Ukrainian
economy. It is noteworthy that they have to do it independently, because if the State
begins to protect national companies in foreign economic relations, Ukraine will
automatically be excluded from the list of market economies, which, in turn, will lead to
a number of discriminatory measures. According to the US trade legislation, a market
economy is to meet the following five criteria: exchangeability of national currency, free
labor market, favorable climate for industrial investments, a low degree of state
ownership and state control over entrepreneurship, and a low degree of state control over
price formation, production and resource allocation.

Should Ukraine agree to sign the Uniform Agreement, it
would have to pass through strict judicial examination to meet the requirements of the
international law. Besides, it must be noted that the WTO rules prohibit its members from
signing agreements that limit export supplies, whereas the proposed Unified Agreement
makes provisions for such actions.

As concerns Ukraine, WTO membership could change the whole
situation for the better. For instance, during antidumping inquiries domestic prices and
manufacturing costs could be taken into account and antidumping sanctions would be applied
to individual exporters only. Besides, WTO has a special board to settle all disputable
issues and its members are subject to only price restrictions, not those regarding

Speaking about the US market, countries with market economy
enjoy a more fair calculation of dumping prices there, which takes into account domestic
prices as well. Besides, such countries are exempted from quota setting and are not
subject to the fixed price limits.

Thus, prior to any negotiations on possible sealing of the
Unified Agreement on Steel, Ukraine should minimize any losses caused by antidumping
inquiries and some other negative factors. As a possible way out, Ukraine can establish an
association embracing all bodies that participate in manufacturing and sale of steel
products (from geological exploration and mining to manufacturing of the finished
products). Since a lot of Ukrainian producers were unable to protect their rights and
suffered from antidumping sanctions, such an association will have to provide them with
efficient assistance during further antidumping investigations. In addition, such an
association should judicially coordinate the activity of all Ukrainian producers in order
to increase the efficiency of their work.

Other possible functions of the association can be as

- to provide Ukrainian producers with industrial statistics
and data on the latest industrial standards;

- to render legal assistance, encourage export operations,
and provide services on insurance, crediting and personnel training;

- to adopt the Code of conduct for its participants;

- to protect the interests of Ukrainian producers when they
appeal to the Ukrainian government;

- to coordinate cooperative research and innovations.

Along with this, prior to the final negotiations on the
Uniform Steel Agreement (which may as well be called “the agreement on voluntary
limitation” of Ukrainian exports to the USA, Ukraine should carry out the antidumping
auditing of the mentioned agreement. First, such monitoring will confirm or negate the
cases of dumping and, secondly, Ukrainian producers will get an opportunity to estimate
their production risks should the antidumping inquiry enter into force (one should not
forget that Ukrainian and US data on Ukrainian exports to the USA differ significantly).

Thus, antidumping auditing will greatly facilitate the
setting of possible dumping limits and confirm the statistical data on Ukrainian exports
to the US market. Speaking of the possible advantages and implications of antidumping
auditing, it should be noted that such a procedure will clearly show the practical
efficiency or inefficiency of the Uniform Steel Agreement. If the auditing indicates that
export prices for Ukrainian-made commodities are quite similar to those existing on
Ukrainian market, Ukraine has considerable odds to win any antidumping inquiry. In other
cases, Ukraine should sign the Uniform Agreement with the US Department of Commerce to
suspend such investigations. In this case, the Department of Commerce will impose
qualitative restrictions on Ukrainian exports and set minimal prices for Ukrainian-made HR
steel but the whole US market will remain open for Ukrainian commodities.

Добавить комментарий