U.S. and Ukraine sign agreement on market access, a step toward WTO (03/12/06)

U.S. and Ukraine sign agreement on market access, a step toward WTO

by Yaro Bihun
Special to The Ukrainian Weekly

WASHINGTON - Ukraine crossed two major hurdles in its quest to become an equal player in the global economy last week as it signed a bilateral World Trade Organization accession agreement with the United States and the U.S. House of Representatives passed legislation that would "graduate" Ukraine from the economic constraints of the Jackson-Vanik Amendment enacted during the Cold War with the Soviet Union.

The bilateral WTO agreement was signed here on March 6 by Ukrainian Minister of the Economy Arsenii Yatseniuk and U.S. Trade Representative (USTR) Rob Portman at a special ceremony in the USTR building near the White House.

The House legislation, introduced by Rep. Jim Gerlach (R-Pa.), was passed two days later, on March 8. (See accompanying story.)

"It's a good, solid agreement that will create closer trade ties between our two countries," Ambassador Portman said before signing the WTO agreement. "Many benefits will flow from more open trade between our two countries."

The agreement was the result of "a tough, complicated commercial negotiation," hard work and the ability to compromise, he said, underscoring intellectual property protection as one of the more difficult areas in the talks.

"Ukraine has made some very significant changes, and we know that Ukraine is determined to continue the process by strict enforcement of intellectual property rights protections," he said, noting that "this commitment helped us get over the finish line on this accession."

The agreement also covers regulations and market access for goods and services, industrial tariffs and non-tariff barriers.

Minister Yatseniuk said the agreement served the mutual interests of both countries. While opening the Ukrainian market to U.S. imports, he said, adding with a smile: "We strongly believe that we'll sometime export something to the United States, too."

Both sides admitted that there was still a lot left to be done to bring all this about.

The next step in the bilateral process is to have Ukraine's Verkhovna Rada and the U.S. Congress pass implementing legislation and regulations, which, on the U.S. side, includes getting Ukraine from under the Jackson-Vanik constraints.

The Senate passed a resolution to that effect last November, but it differs, albeit slightly, from the new House version. Observers close to the process suggest that the Senate may well quickly pass the newer House version, which would then be signed by the president.

Before Ukraine can become a member of the WTO, however, it must also conclude similar trade agreements with other interested WTO member-governments. In all, 149 countries are members of the WTO. Ukraine is among the 32 countries classified as "observers," as are Russia and five other former Soviet states: Azerbaijan, Belarus, Kazakhstan, Tajikistan and Uzbekistan.

As Minister Yatseniuk noted in response to a question, Ukraine has "a few" bilaterals left. Some of them are already finalized, he said, but for various reasons are as yet unsigned. Four of these - with Chinese Taipei, Colombia, Panama and the Kyrgyz Republic - should be concluded "in the nearest future," he added.

As for negotiations with Australia, which recent press reports indicated had run into problems over sugar exports, Mr. Yatseniuk said that, according to his latest information from the talks, both sides are "very flexible right now" and an agreement can be expected "in the nearest future."

Press reports from Ukraine indicated that President Viktor Yushchenko, Prime Minister Yurii Yekhanurov and Foreign Minister Borys Tarasyuk expect Ukraine to become a member of the WTO before the end of this year. If so, this may well gain Ukraine entry before Russia, which is still in the bilateral negotiating process with Washington.

Indeed, on the day following the U.S.-Ukraine signing ceremony, Russian Foreign Minister Sergey Lavrov discussed that issue, among others, with Secretary of State Condoleezza Rice. Afterwards, he told reporters that he expressed Russia's "certain concerns" about the slowness of the process, "since the United States is the only country of today which has not yet signed the protocol on Russia's WTO accession."

He also raised concerns about the Jackson-Vanik Amendment, "which is still on the agenda, despite the fact that everyone knows this as a notorious issue," he said.

Secretary Rice explained that the U.S.-Russian WTO accession agreement has to pass the scrutiny not just of the administration, but also of the Congress. "And so we want to be sure that it is an agreement that can meet that test," she said, noting that there are some outstanding issues in areas of agriculture and services.

Ambassador Portman underscored the same points a day earlier at the signing of the Ukrainian document.

"So we are working very hard to complete our bilateral agreement with Russia, and we're also working hard, frankly, with the U.S. Congress on both the Ukraine agreement and the Russia agreement to be sure we can take them both through the process, the political process, here," he said.

Ukrainian Prime Minister Yekhanurov caused somewhat of a stir in Moscow during his visit in Washington last November when he suggested that Ukraine had to join WTO before Russia; otherwise, he said, "it would make our entry into the WTO practically impossible."

Minister Yatseniuk did not mention the issue of who should be first. He said Ukraine "strongly supports" Russia's membership in the WTO "because we have to act and to exist in similar legal environment" of WTO regulations.

U.S. Agriculture Secretary Mike Johanns also spoke at the signing ceremony, offering his assurances that "on the agricultural side of things we'll do everything we can to be a partner with you."

Among those attending the ceremony were the lead negotiators of both sides, Vice Minister of the Economy Valerii Piatnytskyi and Assistant USTR for WTO Multilateral Affairs Dorothy Dwoskin, as well as Deputy Secretary of Commerce David Sampson, Undersecretary of State Josette Shiner, Ukrainian Ambassador Oleh Shamshur and former U.S. Ambassador to Ukraine William Miller. Also present was Michael Sawkiw Jr., president of the Ukrainian Congress Committee of America.

The bilateral WTO agreement signing and the House Jackson-Vanik vote were not the only highlights in U.S.-Ukrainian relations last week. As this issue of The Ukrainian Weekly was going to press, Ukrainian Foreign Affairs Minister Tarasyuk was beginning his two-day visit to Washington and New York.

His one-day Washington stay on March 9 included meetings with Vice-President Dick Cheney, Secretary of State Rice and other administration officials, members of Congress and the business community, as well as a wreath-laying ceremony at the Taras Shevchenko monument and a foreign policy speech at the Brookings Institution.

His schedule on March 10 in New York was to include meetings with the Secretary-General Kofi Annan and other United Nations officials, and with leaders of the Ukrainian and Jewish communities.

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