CCRR Experts Recommend Ukraine to Apply WTO Norms to Restrict Aggressive Import of Ferro-Alloys

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According to Ukrainian Center of Corporate Relations Research, currently Ukraine faces a situation threatening the existence of domestic ferro-alloy industry due to a rapid growth in imports of ferro-alloy products in the country. In order to neutralize this negative impact, the Center’s experts recommend to impose quotas on the import of ferro-alloys in Ukraine in compliance with the WTO rules.

According to the study "Ferroalloy Industry of Ukraine: Current State, Problems and Prospect" (http://corporativ.info/en/?/analytics/3723/) prepared by the experts of the Center of Corporate Relations Research (CCRR), Ukraine faces a situation threatening the existence of domestic ferro-alloy industry. The research reveals that during the first eight months of 2011, import of ferro-alloys in Ukraine increased by 120% against the same period of 2010. In comparison with 2010 the share of Ukrainian market of ferro-alloys accounted for imported products, grew more than twice, from 25% to 52% of the market volume.

Serhiy Hryshchenko, former Ukrainian Deputy Minister of Industrial Policy (1997-2000, 2005, 2007-2010), agrees with the CCRR's research conclusions: "The Agreement on Safeguard Measures concluded under the General Agreement on Tariffs and Trade (GATT), remaining in force within the framework of the WTO as a successor to GATT, suggests three conditions under which the state has a right to impose measures to protect domestic producers. The first condition is a substantial increase in imports over a certain period of time. The second condition is a presence of damage to domestic producers, for example, a decline in the national manufacturers' market share or forced workforce reduction. The third condition is a direct cause-and-effect relation between the increase in imports and the deterioration of domestic producers. All three of the above mentioned conditions exist in Ukraine with regard to the import of ferro-alloys. Consequently, our country has a good reason to apply WTO rules for restricting imports of ferro-alloy production."

Vyacheslav Butko, Vice-President of CCRR, pointed out: "A dangerous trend that had developed in the market of ferro-alloy production due to a rapid growth of uncontrolled imports, has forced Ukrainian producers to file a request to start a special investigation on imports of ferro-alloys, provided for by the WTO rules and the Law of Ukraine "On the application of special measures in respect of import to Ukraine." The request has been sent to the Ministry of Economic Development and Trade."

Mr. Hryshchenko added: "I believe that in order to prevent further deterioration of the Ukrainian ferro-alloy industry enterprises, to neutralize the negative impact of the aggressive growth in imports of ferro-alloy products in the country, it is advisable to impose quotas on the import of ferro-alloys in Ukraine in compliance with the WTO rules and standards followed by countries-members of WTO."

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Svetlana Goncharova
Corporate Relations Research Center
+380 (44) 490-04-12/13
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