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08KYIV1330, UKRAINE CONSIDERING ITS ROLE IN RUSSIA’S WTO

July 7, 2008

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Reference ID Created Released Classification Origin
08KYIV1330 2008-07-07 13:45 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXYZ0001
PP RUEHWEB

DE RUEHKV #1330/01 1891345
ZNY CCCCC ZZH
P 071345Z JUL 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 5975
INFO RUCNCIS/CIS COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 0355
RUEHGV/USMISSION GENEVA 0131
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L KYIV 001330 
 
SIPDIS 
 
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA 
STATE PLEASE PASS TO USTR FOR CKLEIN, PBURKHEAD, EPORTER 
STATE PLEASE PASS TO DEPT OF AGRICULTURE WASHINGTON DC 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYK 
USDA FOR FAS/ONA (KRAMOS, AMANNIX, MSALLYARDS) 
USDA FOR FAS/OCRA (JFLEMINGS) 
GENEVA FOR USTR 
MOSCOW FOR JKUO 
 
E.O. 12958: DECL: 07/06/2018 
TAGS: ETRD WTRO PGOV RS UP
SUBJECT: UKRAINE CONSIDERING ITS ROLE IN RUSSIA'S WTO 
ACCESSION, WORKING ON ITS OWN OUTSTANDING COMMITMENTS 
 
REF: A. C.KLEIN-YARNELL EMAIL OF 6/20 
     B. KYIV 1202 
     C. KYIV 1077 
     D. KYIV 915 
     E. KYIV 722 
 
Classified By: Acting Economic Counselor William Klein, Reasons: 1.4(b) 
 and (d) 
 
 1. (C) Summary:  Ukraine's lead WTO negotiator Valeriy 
Pyatnytskiy told us on July 4 that Ukraine did not intend to 
block Russia's WTO accession, and was not planning to request 
any tariff concessions from Russia, but would likely make 
some requests of Russia given the importance of their 
bilateral trade relationship.  In particular, Ukraine would 
like to broaden and clarify its Free Trade Agreement with 
Russia.  Regarding Ukraine's own accession commitments, 
Pyatnytskiy said he was hopeful that, during the week of July 
7, Parliament would approve a few outstanding bills, 
including a WTO-compliant version of a Customs Tariff Law 
amendment.  In any case Ukraine would continue to enforce the 
lower, WTO-consistent rates by administrative means if the 
Parliament failed to act, he said.   Pyatnytskiy also pledged 
to keep working on sub-legislative issues of importance, such 
as regulations covering the products of biotechnology and to 
eliminate mandatory certification of foodstuffs.  End Summary. 
 
Russia's WTO Accession 
---------------------- 
 
2. (C) Acting Econ Counselor and Econoff met on July 4 with 
Valeriy Pyatnytskiy, Deputy Minister of Economy and Ukraine's 
lead WTO negotiator, to review Ukraine's outstanding WTO 
commitments and better understand how Ukraine intends to 
approach Russia's WTO accession process.  (Note: Ukraine 
joined Russia's WTO Working Party shortly after its own 
accession on May 16, but has given somewhat mixed signals 
regarding the extent to which it intends to negotiate with 
the Russians (ref E).  End Note.)  Pyatnytskiy said that the 
GOU was still reviewing information provided by the WTO 
Secretariat on Russia's trade regime and was conducting an 
internal, interagency discussion as to what Ukraine should 
request from Russia.  He expressed concern that Russia was 
thus far not taking Ukraine seriously as a negotiating 
partner, noting as an example that Russia had provided 
Ukraine with an old, out-of-date services schedule from 2000. 
 
 
3. (C) Pyatnytskiy stated clearly, "We have no intention of 
blocking Russia's accession," but argued that, because Russia 
accounts for as much as a third of Ukraine's total trade, 
Ukraine had a large and legitimate stake in the Russian 
accession.  He said the GOU recognized that it had joined at 
a late stage of Russia's accession and therefore did not want 
to raise any new issues, but, given the importance of 
bilateral trade, would reserve the right to make certain 
requests. 
 
4. (C) Pyatnytskiy said the GOU did not intend to make any 
requests for tariff concessions, since the two countries 
already have a Free Trade Agreement (FTA) for manufactured 
goods.  Instead, Ukraine would seek to make its trade 
relationship with Russia "clearer and more predictable," he 
said, perhaps by amending their FTA, which dates to the early 
1990s and is no longer fully applicable in the context of a 
normal market economy.  In particular, Pyatnytskiy said the 
GOU would like to see the FTA broadened to include services, 
rather than just goods. 
 
5. (C) Pyatnytskiy identified the following sections of 
Russia's Working Party Report as being of particular interest 
to the GOU: Technical Barriers to Trade (TBT); Sanitary and 
Phytosanitary (SPS) measures; export duties (Ukraine is 
concerned about special, higher rates that Russia might seek 
to apply to Ukraine); import licensing; and the coexistence 
of Russia's federal regulations and regional ones. 
 
6. (C) Acting Econ Counselor told Pyatnytskiy that USTR was 
willing to field questions from the GOU regarding the Russian 
negotiations (ref A).  Pyatnytskiy said he would certainly be 
 
grateful for any information we could provide, and would also 
be interested in any USG advice as to how Ukraine should 
proceed with the negotiations. 
 
Ukraine's Outstanding Commitments 
--------------------------------- 
 
7. (SBU) Acting Econ Counselor emphasized the importance of 
Ukraine's outstanding WTO commitments and asked Pyatnytskiy 
for a status update.  Regarding the contentious amendment to 
the law "On the Customs Tariff of Ukraine" (refs B-D), 
Pyatnytskiy said he was hopeful that the Rada (parliament) 
would accept the recommendatio
ns outlined in President Viktor 
Yushchenko's recent veto of the bill and formalize the 
immediate reduction of customs duties in line with WTO 
commitments.  He also noted that, in absence of any Rada 
action, the GOU would continue to enforce the lower, 
WTO-consistent rates.  Pyanytskiy said he was also hopeful 
for a positive vote during the week of July 7 on several 
other outstanding WTO bills, such as the Veterinary Medicine 
Law, the Fish Law, and the Food Safety Law.  (Note: July 11 
is the Rada's final plenary session before the summer recess. 
 End Note.) 
 
8. (SBU) Pyatnytskiy said the Ministry of Economy was pushing 
hard on the biotechnology front, with the goal of getting 
Cabinet of Ministers approval for all of the roughly ten 
regulatory acts, necessary to fully open the Ukrainian market 
for biotech products, as a joint package.  He said the 
Ministry of Economy appeared to have succeeded in fighting 
off calls to introduce a restrictive labeling system for 
biotech products, but he noted that the Ministry of 
Environment was still blocking further progress.  Pyatnytskiy 
also emphasized the GOU's commitment to eliminating 
certification of foodstuffs, although he recognized that 
doing so required serious institutional changes and faced 
resistance from some governmental bodies, particularly the 
State Standards Committee. 
TAYLOR

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