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09KYIV948, UKRAINE AMENABLE TO OUR WTO PROPOSAL ON EXPORT

June 3, 2009

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Reference ID Created Released Classification Origin
09KYIV948 2009-06-03 10:05 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kyiv

VZCZCXRO9204
PP RUEHDBU RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHKV #0948/01 1541005
ZNR UUUUU ZZH
P 031005Z JUN 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 7894
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHGV/USMISSION GENEVA 0179
RUCNCIS/CIS COLLECTIVE

UNCLAS SECTION 01 OF 02 KYIV 000948 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTAA (APRATTIPATI) 
STATE PLEASE PASS TO USTR FOR EBRZYTWA, JKEMP, CSMOTHERS 
COMMERCE FOR CLUCYK AND DPAREKH 
USDA FOR FAS/ONA AND FAS/OCRA 
GENEVA FOR USTR 
 
E.O.: 12958: N/A 
TAGS: ETRD WTRO PGOV UP
SUBJECT: UKRAINE AMENABLE TO OUR WTO PROPOSAL ON EXPORT 
LICENSING, WORKING ON OTHER TRADE IRRITANTS 
 
REFS: A) STATE 50680 
      B) Yarnell-Desk Email of 5/14 
      C) KYIV 777 
      D) KYIV 497 
 
1. (SBU) Summary: We delivered ref A demarche concerning 
our WTO export licensing proposal to the GOU on June 2. 
The Ministry of Economy, the key GOU agency on trade- 
related issues, supports our initiative and is now 
seeking interagency clearance on an official GOU 
position.  The Ukrainians appear interested in any 
measure that they think might introduce transparency in 
the trade of hydrocarbons.  Regarding bilateral trade 
irritants, the GOU appears to be planning to cancel the 
13 percent import tariff surcharge that remains in effect 
for cars and refrigerators.  Meanwhile, however, there 
have been calls from domestic producers and the President 
to introduce new barriers to agricultural imports; the 
GOU is for now trying to resist that pressure.  Ukraine's 
ban on imported U.S. pork due to H1N1 influenza fears 
remains in effect, and the Ministry of Economy is 
frustrated with the Veterinary Service's slow response in 
reviewing the measure.  End Summary. 
 
Export Licensing Initiative 
--------------------------- 
 
2. (SBU) Econoff delivered ref A talking points and 
materials regarding our proposal at the WTO for increased 
transparency on export licensing to Volodymyr Baluta, 
Head of the Ministry of Economy's WTO Department, on June 
2.  Baluta said he was now drafting an interagency notice 
on the export licensing proposal in order to finalize the 
GOU position.  Baluta noted that the Ministry of Economy, 
which takes the lead in all trade negotiations, supported 
the initiative and said he expected other Ministries to 
follow suit.  Baluta added that he saw the initiative as 
particularly targeting exports of raw materials and hoped 
it would be a first step towards more transparency in the 
export of hydrocarbons.  (Comment: Baluta appears very 
focused on the potential to extend WTO rules to the oil 
and gas sectors, as he has mentioned the issue at almost 
every recent meeting with Econoffs.  End comment.) 
 
13 Percent Import Tariff Surcharge 
---------------------------------- 
 
3. (SBU) Baluta reported that, during the week of May 25, 
PM Tymoshenko tasked the Ministry of Economy to draft a 
Cabinet of Ministers Resolution to cancel the 13 percent 
import tariff surcharge remaining on automobiles and 
refrigerators (ref D).  (Comment: Such a directive from 
the PM suggests that the GOU intends to cancel the 
remaining tariff hikes within a few weeks, although other 
members of the Cabinet could still try to derail the 
effort.  End comment.)  Baluta also noted that, while 
Ukraine went ahead with its justification for the tariff 
surcharge at the WTO, the Ministry of Economy was 
anticipating a condemnation by the WTO Balance-of- 
Payments Committee, since Ukraine's balance-of-payments 
crisis had clearly abated. 
 
4. (SBU) Econoff expressed concern regarding recent calls 
for increased protection for domestic agricultural 
producers, particularly Presidential Decree No. 378, 
issued on May 29, which called on the government to 
reconsider a tariff surcharge on imported meat.  Baluta 
said that the Ministry of Economy opposed such calls for 
increased import barriers and was drafting a note to the 
Presidential Secretariat explaining the negative 
consequences of raising import duties, including possible 
retaliation by other WTO members. 
 
H1N1 Influenza Pork Ban 
----------------------- 
 
5. (SBU) Following up on his promise to examine Ukraine's 
import ban on U.S. pork due to H1N1 influenza fears (ref 
C), Baluta said that Deputy Minister of Economy Valeriy 
Pyatnytskiy had sent a letter of inquiry to the 
Veterinary Service.  Much to the Ministry of Economy's 
chagrin, said Baluta, the Vets had not yet officially 
 
KYIV 00000948  002 OF 002 
 
 
responded.  He noted that, in informal discussions, the 
Vets indicated they planned to maintain the ban until as 
late as the end of June.  (Comment: Chief Vet Petro 
Verbitskiy told the press on May 13 that the ban would 
soon be lifted (ref B).  We are not sure if Verbitskiy 
was being duplicitous, or if bureaucracy intransigence at 
the Veterinary Service is to blame for the import ban's 
continuation.  End comment.) 
 
PETTIT

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