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Ukraine to flex WTO muscles versus Russia
Journal Staff Report

KIEV, Feb. 1 Ukraine may use its membership in the World Trade Organization as leverage in $3 billion worth of trade disputes with Russia, said President Viktor Yushchenko.

Ukraines WTO membership bid is expected to be approved by the trade bodys General Council on Tuesday, ending almost 15 years of difficult talks. Ukraine is currently the biggest country outside the WTO besides Russia.

"Considering Russia's own aspirations to join the WTO, we will have interesting negotiations" on thorny issues such as Russian anti-dumping duties, Yushchenko said in an interview with AFP.

The comment is a remarkable shift in Ukraines foreign policy as the country has been so far assuring Moscow that its WTO membership would not affect bilateral trade issues. Russia planned to join the WTO this year but has continually set back its deadline for joining.

Members of the 151-nation global trade body have the right to demand bilateral agreements with aspirant members that can be used to extract trade concessions.

Yushchenko is expected to attend the historical meeting of the WTO General Council, which is expected to approved Ukraines accession package.

Ukraine has been complaining Russias trade restrictions worth up to $3 billion annually prevent an increase of exports from Ukraine.

Ukraine has a deficit in trade with Russia at about $6 billion, mainly due to massive imports of natural gas and oil, while the restrictions have kept the deficit from narrowing, analysts said.

The comments come ahead of Yushchenkos visit to Moscow on Feb. 12 for important trade and political negotiations, including the stationing of Russias naval Black Sea Fleet in Crimea.

After the General Council approves Ukraines accession package, the country will have to ratify the deal by July 4. Ukraine will become a WTO member 30 days after the ratification.

Ukraines economic growth is expected to accelerate by an extra 1.5 to 1.8 percentage points annually through an expected increase in exports and investment after the country joins the WTO, analysts said.

The accession may help Ukraine to accelerate its economic expansion from 7.3% growth reported in 2007. The government has been previously expecting the growth of 6.8% on the year in 2008.

Ukraines economy is estimated at more than $176 billion in 2008, and an extra growth of 1.8% may be an equivalent of $3.2 billion in additional economic growth, analysts said.

Joining the WTO is Yushchenkos key economic policy and trade initiative, and is expected to boost Ukraines exports to the rest of the world.

The accession would also help Ukraine to start negotiations with the EU over free trade, a move that is expected to increase mutual trade between the two and perhaps push Ukraine closer towards accession to the EU, Yushchenkos primary foreign policy goal. (tl/ez)

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