Brussels, 30/04/2015 (Agence Europe) - The 5% surcharge on imports of industrial products and 10% surcharge on imports of agricultural products imposed by Ukraine since 25 February to deal with “exceptional conditions” affecting its balance of payments was the subject of consultations with the WTO member countries at a meeting, on Tuesday 28 April, of the WTO committee on restrictions applied for balance of payments purposes.
During the meeting, a representative from the International Monetary Fund (IMF) gave an overview of Ukraine's economic situation - including its balance of payments and level of foreign exchange reserves. The IMF representative also spoke about the structural adjustment measures that Ukraine has committed to adopt as part of the four-year US$17.5 billion extended fund facility programme approved by the IMF board in March 2015.
Ukraine stated that its import surcharge - which it notified to the committee on restrictions applied for balance of payments purposes - is applied to all WTO members on a most favoured nation basis; covers almost all tariff lines; excludes some essential goods including oil and pharmaceuticals; and will be removed no later than the end of 2015. Ukraine also stated that this measure does not exceed the extent necessary to address the balance of payments problems, and that it is restrictive but not prohibitive.
While they acknowledged the deterioration of Ukraine's balance of payments, most WTO member countries participating in the discussions underlined the burden that the Ukrainian surcharge is causing for their exporters, and they urged Ukraine to remove the measure no later than the end of 2015. They also urged Ukraine to implement economic reforms and to remain consistent with WTO rules, while looking for less trade-distortive measures. The member countries also asked for clarification from Ukraine on the economic justification for its import surcharge and on the impact it hopes the surcharge will have on restoring its balance of payments situation. In addition, the member countries questioned Ukraine on its efforts to limit the increase in domestic prices of products; on the criteria used to determine the two different tariff surcharge rates; and on the criteria used to determine early removal of the measure.
The committee consultations will resume in June. (Emmanuel Hagry)