Brussels, 29/01/2008 (Agence Europe) - At a meeting in Brussels on Tuesday 29 January 2008, EU Trade Commissioner Peter Mandelson and Ukrainian prime minister Yulia Timoshenko agreed to enter negotiations over a bilateral free trade agreement (FTA) between the EU and Ukraine 'as soon as possible' after the ratification by the World Trade Organisation's General Council on 5 February 2008 of Ukraine's membership of the WTO. Upon invitation from the Ukrainian pm, Peter Mandelson will travel to Kiev, the Ukrainian capital, in the next few weeks. In a decision stating the EU's position for the WTO General Council, the EU Council gives an overview of Ukraine's WTO accession criteria. Kiev lodged its application to join in 1993. The main aspects of the criteria are as follows:
Industrial goods. The average of Ukraine's initial bound rates (IBR) is 4.91%, which will be reduced to 4.81% (FBR). Implementation periods between 1 and 5 years have been introduced only for 226 lines. This leads to an average staging of 0.05 years. Only 71 tariff lines will be at or below 15% duty rates. 5 lines will remain at peak level of 25%. All tariffs will be found. As regards sectoral initiatives, tariffs on IT, paper, medical equipment, furniture and toys will be eliminated. In the other sector initiatives, tariffs go below 1% (agriculture 0.71% and construction equipment 0.35%, steel (MSA) 0.22% and pharmaceuticals 0.05%). Chemicals harmonisation will be at 5.32%. On machinery and appliances, the sectors of greatest interest for the EU, the tariffs will be at 5.32%. The tariffs on vehicles and parts will be at 7.97%.
Agricultural goods. On agricultural goods, the average of the initial bound rates (IBR) is 11.05%, which will be reduced to 10.61%. In agriculture, only 20 tariff lines have an implementation period (2 years). The highest rates are sunflower seed oil with 30% and sugar with 50%.
Services. Ukraine undertakes commitments allowing for competition between domestic and foreign service suppliers in practically all sectors and sub-sectors, which will bring benefits both to the Ukrainian economy and to the EU, which is the world's leading exporter in this field. Foreign service suppliers will face no quantitative or discriminatory restrictions at all in key service sectors such as professional services, the vast majority of business services, postal and courier services in the areas not reserved for the national monopoly, telecoms services, construction services, distribution services, environmental services, tourist services, the vast majority of financial services, and the fast majority of transport services, including pipeline transport. The few sectors for which Ukraine does not undertake commitments include investigation and security services, audiovisual services, space transport and pushing and towing services for maritime and rail transport. For passenger and freight rail transport, the commitments are limited to the consumption abroad of these services. For insurance services, Ukraine retails limitations on cross-border supply similar to those of the rest of the WTO membership and will allow direct branching only five years after its accession to the WTO and retains some limitations.
Commitments of particular interest to the EU. Ukraine has taken on a commitment not to apply mandatory minimum price requirements to any imported products. Upon accession, all rail transportation fees would be applied on a non-discriminatory basis to goods transported between domestic locations, imported, exported, or in transit. Ukraine has changed its legislation to bring the licensing fees for import and export of alcoholic drinks and tobacco to the level of UAH 780 (€104) to eliminate the discriminatory excise tax treatment of imported alcoholic beverages, in line with WTO rules. Ukraine has taken on a commitment to apply the WTO provisions concerning customs valuation upon accession and to gradually reduce its export duties on scrap metal, hides and skins, live cattle and oilseeds significantly within a 5 to 8 year period. Ukraine has changed its legislation to eliminate all WTO-incompatible subsidies provide to automobile, shipbuilding and aircraft construction industries. Ukraine will apply all its laws, regulations and other measures governing transit of goods (including energy), and charges for the transport of goods in transit in conformity with Article V of the GATT 1994 and other relevant provisions of the WTO Agreement upon accession. On intellectual property rights, Ukraine provides co-existence of geographical indications with prior trademarks under certain circumstances in accordance with Article 17 of the TRIPS Agreement. Regarding data protection, Ukraine provides five years protection for pharmaceuticals and ten years for agrichemicals. (E.H.)