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Ukraine may seek new duties to join WTO
Journal Staff Report

KIEV, Aug. 8 – Ukraine may seek to renegotiate some of its import/export duties that may delay for about a year the country’s accession to the World Trade Organization, Prime Minister Viktor Yanukovych suggested Tuesday.

Ukraine planned to join the WTO by the end of 2006, but Yanukovych argued domestic businesses had apparently needed better protection by higher duties, which could further delay the talks into 2007.

“There are some painful issues for our businesses and there is an opportunity to make deals with our partners while signing agreement to join the WTO,” Yanukovych said addressing the staff of the Foreign Ministry. “We have to settle these issues in 2007 if we have no time to do it in 2006.”

The Regions Party agreed to support Ukraine’s accession to the WTO by the end of 2006 when Yanukovych had signed a pact with President Viktor Yushchenko and other parties last week to form a coalition government.

Any delay of the accession would lead to a clash between Yushchenko, who pushes for the fast accession, and Yanukovych. The development may force Our Ukraine, Yushchenko’s party, to quit the government, making it less stable. It would also delay foreign direct investment and worsen the country’s international image, analysts said.

But Boris Tarasiuk, the Foreign Minister and a senior member of Our Ukraine, said later in the day that Ukraine has been still committed to join the WTO in 2006.

“Don’t hurry up to make your conclusions,” Tarasiuk told 1+1 television later Tuesday. “I haven’t noticed any change in the position of the prime minister. Also, there is an agreement among all parties that had signed the pact to join the WTO in 2006.”

All key negotiations over Ukraine’s accession to the WTO have been handled in 2005 by the government of Prime Minister Yulia Tymoshenko and earlier this year by the government of Prime Minister Yuriy Yekhanurov.

The Regions Party, which is backed by some of the country’s wealthiest steel barons, has been until last week criticizing the accession as too quick.

Other senior party members, such as Mykola Azarov, are known to support higher import duties to make life easier for some domestic companies facing greater competition after Ukraine joins the WTO.

Ukraine completed its bilateral talks with WTO member states and is completely ready to join the trade body. However, approval of several laws, such as reducing the duty on exports of scrap ferrous metal, which is used in production of steel, is yet to be approved by Parliament.

Ukraine needs to join the WTO before it can start talks with the European Union over signing a free trade agreement between the two, Yushchenko’s major policy goal. This would bode well for Yushchenko’s plans for Ukraine’s joining the EU within the next 10 years.

Meanwhile, Russia has been vehemently opposing Ukraine’s fast accession to the WTO amid fears that Ukraine could block Russia’s own accession to the organization.

Russia has been persistently calling on Ukraine to join the WTO at the same time, a policy that had until last week been shared by the Yanukovych party.

“If the government’s position is reconsidered towards higher or lower duties that may freeze the accession,” Oleksandr Zholud, an analyst with the International Center for Prospective Studies, said. The government’s plans to renegotiate the duties may signal an attempt “to coordinate the accession with Russia.” (tl/ez)

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