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11 September 2018

International Trade News. June – August 2018

WTO NEWS

WTO PANEL ISSUES REPORT IN THE CASE “EU – ENERGY PACKAGE”

On 10 August 2018, the WTO Panel issued a report in the case “EU — Energy Package” (with the participation of Ukraine as a third party). The Panel rejected most of Russia’s claims concerning the alleged incompatibility of the EU’s energy policy measures with WTO rules. At the same time, the Panel found that two OPAL conditions, the third-country certification measure in Hungarian, Croatian and Lithuanian legislation and the Trans-European Networks for energy measure, fail to comply with WTO covered agreements.[1]

 

LONG-AWAITED RULING ON AUSTRALIA’S TOBACCO PLAIN PACKAGING LAWS

On 28 June 2018, the Panel issued its report in one of the most high-profile WTO cases “Australia – Plain Packaging”. The Panel rejected all the claims filed by Cuba, the Dominican Republic, Honduras and Indonesia and ruled that Australia’s plain packaging policy for tobacco products is in line with WTO rules.[2] Honduras and the Dominican Republic have already appealed the ruling, so it is still to be seen whether the WTO-consistency of Australian legislation will be confirmed by the Appellate Body.[3]

For more details, follow the link: https://sk.ua/news/australia-tobacco-plain-packaging-ds435-ds441-ds458-ds467/

 

TRADE WAR-RELATED DISPUTES

On 8 March 2018, the United States imposed an additional import duty of 25% on certain steel products and an additional import duty of 10% on certain aluminium products from all countries with several exemptions.[4] These measures were preceded by two investigations conducted by the United States Department of Commerce (USDOC) under Section 232 of the United States Trade Expansion Act of 1962, as well as based on Section 705 of the United States Code of Federal Regulations. In both investigations, the USDOC decided that present quantities and circumstances of steel and aluminium imports were weakening the United States internal economy and threatened to impair national security.

In this regard, nine WTO Members (namely China, India, Canada, the European Union, Mexico, Norway, the Russian Federation, Switzerland, and Turkey) submitted a request for consultations claiming that the measures are inconsistent with the GATT 1994 and the Agreement on Safeguards.[5]

Furthermore, Canada, China, the European Union, Mexico and Turkey imposed additional duties on imports of certain US products. In response, the United States requested consultations stating that the actions by these five WTO members are inconsistent with the GATT 1994.[6]

 

WTO EXPERTS ADOPTED TWO REPORTS ON UKRAINE-RUSSIA DISPUTES

On 20 July 2018, the WTO circulated a panel report in the case “Ukraine — Ammonium Nitrate (Russia)”. The Panel has clearly confirmed that investigating authorities in antidumping investigations are entitled to adjust the costs of raw materials of foreign producers if there is sufficient evidence confirming that such costs are unreliable. However, the Panel ruled that the Ministry of Economic Development and Trade of Ukraine violated certain procedural requirements when conducting anti-dumping investigation (e.g. failure to disclose essential facts necessary to understand the dumping determinations, failure to give interested parties sufficient time to comment on the disclosure of essential facts etc.).[7] Ukraine disagreed with the Panel regarding violation of procedural requirements and filed an appeal in this case.[8]

For more details, follow the link: https://www.eurointegration.com.ua/articles/2018/07/25/7084779/

On 30 July 2018, the Panel issued its decision in the “Russia — Railway Equipment” case. The Panel confirmed that the non-recognition of certificates issued in EAEU countries other than Russia, instructions suspending certificates, and decisions rejecting applications for certificates fail to comply with the GATT 1994 and TBT Agreement. In the Panel’s view, Ukraine did not demonstrate the existence of systematic import prevention because of incomparable situation in Ukraine during the period from April 2014 to December 2016.[9] Similarly, Ukraine exercised its rights under Article 16.4 of the Dispute Settlement Understanding and appealed the panel report. Thus, the final determinations are yet to be done by the Appellate Body.[10]

 

OTHER DISPUTES IN THE WTO

In addition, during the period from June to August 2018, WTO Members launched the following disputes: China has requested consultations with the United States regarding US safeguard duties imposed on imports of crystalline silicon photovoltaic products[11] and additional duties applied by the United States on imports of Chinese goods,[12] Japan has requested consultations with Korea regarding Korean anti-dumping duties levied on stainless steel bars[13] etc.

 

TRADE REMEDIES

UKRAINE MADE A NUMBER OF DECISIONS TO PROTECT DOMESTIC PRODUCERS

On 4 July 2018, the Intergovernmental Commission on International Trade issued notification on the application of trade defence measures, in particular:

  • safeguard measures on imports of sulfuric acid and oleum, regardless of country of origin and export in the form of import quotas for a three-year period.[14]
  • definitive anti-dumping measures on imports of certain carbamide formaldehyde products originating from the Russian Federation in the amount of 39.94% for a five-year period.[15]

 

EUROPEAN COMMISSION IMPOSED PROVISIONAL SAFEGUARD MEASURES ON IMPORTS OF STEEL PRODUCTS

On 19 July 2018, provisional safeguard measures on imports of 23 steel product categories came into effect. These measures address the diversion of steel from other countries to the EU market in response to recently imposed US tariffs. Provisional safeguard measures will apply in the form of tariff quotas during a 200-day period based on the “first come, first served” principle. Additionally, a 25% tariff will only be imposed once imports exceed the average of imports over the last three years.[16] Provisional safeguard measures will apply in respect to 11 categories of Ukrainian steel products.[17]

 

EUROPEAN COMMISSION REFUSED TO APPLY ANTI-DUMPING DUTIES IN RESPECT OF UKRAINIAN FERRO-SILICON

On 5 June 2018, the European Commission terminated anti-dumping proceedings concerning imports of ferro-silicon originating in Egypt and Ukraine as EU producers withdrew their complaint.[18] It appears that the complaint was withdrawn because the EU enacted stricter legislation on protection against dumped and subsidized imports. It is likely that domestic industry considered it more reasonable to withdraw the complaint and potentially to initiate a new investigation that will result in much higher antidumping duties based on the new legislation.

 

THE UNITED STATES HAS ABOLISHED ANTI-DUMPING DUTY ON SOLID AMMONIUM NITRATE FROM UKRAINE

On 18 June 2018, the Department of Commerce decided to withdraw antidumping measures on imports of solid agricultural grade ammonium nitrate originating from Ukraine introduced in 12 September 2001 of 156.29%. The Department of Commerce revoked this antidumping duty order because domestic interested parties did not participate in the sunset review.[19]

 

REGIONAL INTEGRATION

UKRAINE AND CANADA PRESENTED FREE TRADE AGREEMENT TO WTO

On 19 June 2018, a Ukrainian delegation took part in a meeting of the WTO Committee on Regional Trade Agreements in Geneva. During the meeting, the Committee considered, among other issues, a factual presentation of the Free Trade Agreement between Ukraine and Canada.[20]

 

UKRAINE AND ISRAEL COMPLETED THE LEGAL REVIEW OF THE TEXT OF THE FREE TRADE AGREEMENT

On 1 August 2018, Ukraine and Israel completed the legal review of the text of the draft of the Free Trade Agreement between the two countries. During the legal review, the parties agreed on the text of 12 sections and annexes of the draft.[21]

 

UKRAINE AND QATAR TO ESTABLISH A JOINT COMMISSION ON ECONOMIC, TRADE AND TECHNICAL COOPERATION

On 22 August 2018, the Cabinet of Ministers of Ukraine decided to establish a Joint Commission on Economic, Trade and Technical Cooperation between the Government of Ukraine and the Government of Qatar. This Joint Commission will coordinate the activities of both states aimed at developing and deepening cooperation between Ukraine and Qatar in the field of trade and economics, as well as monitor the practical implementation of pertinent agreements.[22]

 

UKRAINE AND CHINA SIGNED A MEMORANDUM ON PROMOTION OF MUTUAL POULTRY TRADE

On 7 June 2018, Ukraine and China signed a memorandum on cooperation and promotion of mutual poultry meat trade. The memorandum provides for mutual exchange of information, documentation, achievements on prevention and control of avian influenza and other poultry diseases, conducting risk assessments and negotiations on inspections and sanitary requirements for trade in poultry meat. The signature of the memorandum will facilitate the expansion of bilateral trade between Ukraine and the PRC and increase the range of products for import or export.[23]

 

JAPAN AND THE EU SIGNED A TRADE DEAL TO ELIMINATE NEARLY ALL TARIFFS

On 17 July 2018, the EU and Japan signed a landmark deal that will eliminate nearly all tariffs on mutual trade in goods. It was recognized as “the largest bilateral trade deal ever”. The deal eliminates about 99 percent of tariffs on Japanese goods sold to the EU. About 94 percent of tariffs on European exports to Japan will be lifted, rising to 99 percent in the future.[24]

 

PHARMA

 

THE MINISTRY OF HEALTH OF UKRAINE APPROVED THE REGISTER OF PHARMACEUTICALS SUBJECT TO REIMBURSEMENT

On 23 July 2018, the Ministry of Health of Ukraine approved the Register of Pharmaceuticals, the cost of which is subject to reimbursement (the Order No. 1367). The updated Register includes 261 pharmaceuticals from 46 producers (18 Ukrainian and 28 imported ones).[25]

 

OTHER TRADE NEWS

 

UKRAINE BANNED THE IMPORT OF CEMENT CLINKERS FROM RUSSIA

On 29 August 2018, the Cabinet of Ministers of Ukraine banned the importation of cement clinkers originating in the Russian Federation. The measure was introduced in order to protect national economic security interests and the interests of Ukrainian cement producers from discriminatory actions against Ukraine by the aggressor state.[26]

 

RUSSIA EXTENDED RESTICTIONS ON THE TRANSIT OF CERTAIN GOODS FROM UKRAINE

On 28 June 2018, the Order of the President of the Russian Federation, which prolongs restrictions on the transit of certain goods from Ukraine to Kazakhstan and Kyrgyzstan until 1 January 2019, entered into force.[27]

 

UKRAINE EXTENDS THE INCREASE OF EXPORT DUTY ON SCRAP OF FERROUS METALS FOR ANOTHER YEAR

On 18 June 2018, the President of Ukraine signed Law No. 8226 extending the increase of export duty on scrap of ferrous metals from 30 to 42 EUR per tonne for another year. The measure was initially introduced in 2016 in order to address the deficit of scrap metals in the internal market of Ukraine.[28]

 

UKRAINIAN GOVERNMENT CREATED A COUNCIL ON TRADE AND SUSTAINABLE DEVELOPMENT

On 13 June 2018, the Cabinet of Ministers of Ukraine created a Council on Trade and Sustainable Development. The task of the Council is to organize the work of the Advisory Group on Trade and Sustainable Development in accordance with the EU-Ukraine Association Agreement and to support civil society, trade and sustainable development.[29]

For more information, please contact Anzhela Makhinova, Victoria Mykuliak, Ivan Baranenko.

[1] https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds476_e.htm

[2] https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds467_e.htm

[3]https://www.wto.org/english/news_e/news18_e/ds441apl_23aug18_e.htm, https://www.wto.org/english/news_e/news18_e/ds435apl_19jul18_e.htm

[4] As of 1 June 2018, additional duties on certain steel products apply to all countries of origin except Argentina, Australia, Brazil and Korea, and additional duties on certain aluminium products apply to all countries of origin except Argentina and Australia. Quotas have been introduced concerning steel imports from Argentina, Brazil and Korea, and aluminium imports from Argentina.

[5]https://www.wto.org/english/news_e/news18_e/ds543rfc_05apr18_e.htmhttps://www.wto.org/english/news_e/news18_e/ds547rfc_23may18_e.htm,

https://www.wto.org/english/news_e/news18_e/ds548_550rfc_06jun18_e.htm,

https://www.wto.org/english/news_e/news18_e/ds551rfc_07jun18_e.htm,

https://www.wto.org/english/news_e/news18_e/ds552rfc_13jun18_e.htm,

https://www.wto.org/english/news_e/news18_e/ds554rfc_02jul18_e.htm,

https://www.wto.org/english/news_e/news18_e/ds556rfc_12jul18_e.htm,

https://www.wto.org/english/news_e/news18_e/dsrfc564_20aug18_e.htm

[6] https://www.wto.org/english/news_e/news18_e/ds557_to_561rfc_19jul18_e.htm

[7] https://www.wto.org/english/news_e/news18_e/493r_e.htm

[8] https://www.wto.org/english/news_e/news18_e/ds493apl_23aug18_e.htm

[9] https://www.wto.org/english/news_e/news18_e/499r_e.htm

[10] https://www.wto.org/english/news_e/news18_e/ds499apl_27aug18_e.htm

[11] https://www.wto.org/english/news_e/news18_e/ds562_563rfc_16aug18_e.htm

[12] https://www.wto.org/english/news_e/news18_e/ds565rfc_27aug18_e.htm

[13] https://www.wto.org/english/news_e/news18_e/ds553rfc_20jun18_e.htm

[14] https://ukurier.gov.ua/uk/articles/mizhvidomcha-komisiya-z-mizhnarodnoyi-torgivli1223/

[15] https://ukurier.gov.ua/uk/articles/mizhvidomcha-komisiya-z-mizhnarodnoyi-torgivli1224/

[16] http://trade.ec.europa.eu/doclib/press/index.cfm?id=1892

[17] http://me.gov.ua/News/Detail?lang=uk-UA&id=63847838-93a6-4851-aa3f-09b773dfe1c3&title=UkrainaZakhischaInteresiUkrainskikhMetalurgivVRamkakhZakhisnogoRozsliduvanniaVs

[18] http://trade.ec.europa.eu/doclib/docs/2018/june/tradoc_156918.term.en.L139-2018.pdf

[19] https://www.gpo.gov/fdsys/pkg/FR-2018-06-18/pdf/2018-12995.pdf

[20]In accordance with WTO transparency rules, member states shall notify the WTO on significant changes in their trade policies.

http://me.gov.ua/News/Detail?lang=uk-UA&id=8b8e1588-1cd6-4e0f-8619-fce5f391d235&title=UkrainaTaKanadaPrezentuvaliVSotUgoduProVilnuTorgivliu

[21] http://me.gov.ua/News/Detail?lang=uk-UA&id=16106285-17e5-4fd2-97d8-87e0dd39f33f&title=UkrainaTaIzrailZavershiliYuridichnuPerevirkuTekstuUgodiProVilnuTorgivliu

[22] http://me.gov.ua/News/Detail?lang=uk-UA&id=ce3a6bae-d57b-4742-84fc-adf4924de3e0&title=UkrainaTaKatarStvoriatSpilnuKomisiiuZEkonomichnogo-TorgovelnogoITekhnichnogoSpivrobitnitstva

[23] https://www.epravda.com.ua/news/2018/06/14/637776/

[24] https://www.apnews.com/bb26231767374debafda43f4d99d5bba

[25] http://moz.gov.ua/article/ministry-mandates/nakaz-moz-ukraini-vid-03082018–1446-pro-vnesennja-zmin-do-reestru-likarskih-zasobiv-vartist-jakih-pidljagae-vidshkoduvannju-stanom-na-23-lipnja-2018-roku

[26] https://www.kmu.gov.ua/ua/news/uryad-zaboroniv-import-cementnih-klinkeriv-z-rosijskoyi-federaciyi

[27] http://publication.pravo.gov.ru/Document/View/0001201807020005

[28] http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=63784

[29]http://me.gov.ua/News/Detail?lang=uk-UA&id=44725857-ddc4-4a47-b272-1afd5ffeb5c5&title=UriadStvorivRaduZPitanTorgivliTaStalogoRozvitku

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