RESTRICTED
WORLD TRADE WT/ACC/UKR/22/Add.2
21March 1997
ORGANIZATION(97-1174)
Original: English
ACCESSION OFUKRAINE
Additional Questions andReplies
Addendum
TheGovernmental Commission onUkraine 'sAccession totheWTO hasprovided thereplies
reproducedhereundertothequestionssubmittedbydelegationsconcerningdocumentWT/ACC/UKR/22.
_______________
TABLE OFCONTENTS
Section Question Number PageNumber
Strategic Problems 1-5 2
Technical Issues 6 3
Additional Goods Market Access Issues 7-15 4
Seasonal Duties 16-29 6WT/ACC/UKR/22/Add.2
Page2
Strategic Problems
Question 1
Itappears thatUkraine iswilling tobindallproducts initstariff schedule. Weviewcomprehensive
bindings asakeyfirststepindeveloping amutually acceptable market access package ongoods.
Isourunderstanding correct?
Answer:
Yes,yourunderstanding iscorrect.
Question 2
Weareconcerned about Ukraine 's"aim" toreach afinalaverage tariff rateof14percent -this
isfartoohigh-halfthatnumber would bemore acceptable. Recently, inits"Recent Developments"
publication, theIMFindicated thattheweighted average ofUkraine 'sapplied tariffs was"around
5percent." Itwould beuseful toknow howthisplanforafinaltariff relates toUkraine 'scurrent
applied tariffs. Ourgeneral position isthattariff negotiations should notresult inincreases in
protection from thecurrent situation.
Answer:
The14%average weighted rateofimport tariffrelates toallnomenclature ofgoods, including
agriculturalproducts.Inaccordancewiththeresultsof1996theaverageweightedrateconstitutes5.12%.
However average weighted rateinrelation toallthenomenclature excluding energy products (gas,
oil,fueletc.) constitutes 7.6%, andtheaverage waited rateforagricultural products is25.12%
Question 3
Wealsoassume thatUkraine 'sproposal isanegotiating position, i.e.,thatthestaging formulas
andtimeframe arenegotiable.
Oneobservation. Thegeneral approach intariff negotiations istomake cutsineachyear. Such
aformula tends tobebeneficial toyour producers aswellbecause agradual reduction avoids
large tariff changes inanygiven year.
Inthesection called "Major Foundations fortheRestructuring oftheCustoms Tariff," Ukraine
states thatoneoftheprinciples forrestructuring istheestablishment of"maximum rates for
manufactured goods ofnomore than 30percentofthecustoms value." However, thetariff
schedule annexed tothepaper includes initial rates of40-50% onsome manufactured goods such
asfurniture andcertain equipment inchapter 85.
Could Ukraine explain thisapparent difference.
Answer:
Indeed, inprinciple according tothe“Major Foundations fortheRestructuring oftheCustoms
Tariff," themaximum ratesformanufactured goods can’tbemore than30percentofthecustoms
value. However, thefurniture (9401, 9403) relates tothegoods which arethesubject forexcise taxation
themaximum levelonwhich canreach 70%. Itshould benoted thatinaccordance withtheconcept
paper ontransformation ofcustoms tariff thelevel ofcustoms dutyforthese goods willbereduced
till10%intheframework ofharmonization.WT/ACC/UKR/22/Add.2
Page3
Question 4
TheUnited States andothers participated inzerotariff initiatives in10sectors aspartofthe
Uruguay Round (agricultural equipment, beer, construction equipment, distilled spirits, furniture,
medical equipment, paper, pharmaceuticals, steel, andtoys)andharmonization ofchemical tariffs.
Wealsoparticipate intheAgreement onCivil Aircraft thatcallsforzeroduties oncertain items
when usedforcivilaircraft.
Wearepleased thattheconcept paper suggests acceptance ofmany ofthese sectoral initiatives,
albeit withstaging thatweviewassubject tonegotiation.
What factors limit Ukraine from endorsing allthese sectoral initiatives (i.e., whydoesthepaper
notpropose zerotariffs onagricultural equipment, construction equipment, medical equipment
andcivilaircraft; andwhydoesUkraine want 6.5percent tariffs onchapter 28chemical items
rather thanthe5.5percent intheharmonization initiative).
Answer:
Concerning theabove-mentioned equipment itshould benoted thatinUkraine there are
machine-building enterprises thatarenowintheprocess ofreconstruction andneeded aminimum level
ofsupport fortheperiod ofharmonization.
Thereduction ofimport tariffrateinrelation tothechapter 28canbesubject fornegotiations.
Question 5
Wewould alsoliketoacquaint Ukraine withanewzerotariff initiative thattheU.S., EUand
others arecurrently negotiating. It'scalled theInformation Technology Agreement Ccalling for
zeroduties bytheyear2000 onproducts likecomputers, semiconductors, telecommunications
equipment andother products thatarethekeycomponents ofthe"information super highway".
InWT/ACC/25, thereply toquestion 35the"List ofCertain Goods forWhich theCustoms Duty
HasBeen Changed" describes thenewspecific rates based onengine displacement formotor
vehicles. Intheconcept paper Ukraine proposes advalorem rates formotor vehicles.
CanUkraine confirm thatitintends toapply advalorem tariff rates onmotor vehicles?
Answer:
Theconcept paper defines themaximum levels ofimport duties inadvalorem form, butdo
notdefine theformofapplication ofcustoms dutyintheframework oflevelestablished intheconcept
paper.
Technical Issues
Question 6
There isalsosome technical information thatwould helpusmore fullyunderstand yourposition
andprepare adetailed request. Wewant tosortoutanytechnical tariff issues assoonaspossible,
sothatournegotiations onthesubstance ofUkraine 'sgoods schedule arenotdelayed later on
bytechnical issues.WT/ACC/UKR/22/Add.2
Page4
Could webegiven acopy ofUkraine 'scurrent tariff schedule electronically? Thisinformation
isvery important tohelp usanalyze Ukraine 'simport data andtounderstand thecurrent
nomenclature andtariff rates facing U.S.exporters.
Wewould alsoappreciate aconcordance between itscurrent tariff nomenclature andtheHS96,
sowecaneffectively analyze thetrade dataavailable tous.
Answer:
Thecurrent import dutyrateshavebeentransmitted inMarch, 1997, andinaccordance with
Government ’sprogramme Ukraine willstartfrom1January 1998toapply goods nomenclature based
onHS96.
Additional Goods Market Access Issues
Question 7
Weappreciate theinformation provided byUkraine todatewithrespect toexport subsidies and
internal support. However, member countries willhave amuch better understanding ofthese
policies onceUkraine submits thisinformation andtheother daterequested inWT/ACC/4. We
urgeUkraine tosubmit thisdocument assoonaspossible
Answer:
Theinformation onhome support andexport subsidies willbeprovided totheWTO
member-states ontheapproval oftheStateBudget for1997 bytheSupreme Rada ofUkraine andthe
approval ofExport Potential Development Program. ThedraftState Budget envisages thepossible
future support forcattle-farming, however, itdoesnotprovide forexport subsidies.
Question 8
When willtheHS1996 6-digit nomenclature beimplemented atUkraine 'sborders?
Answer:
Thefirstedition oftheUkrainian Classification ofGoods forForeign Economic Activity
(UCGFEA) wasdeveloped inaccordance withtheresolutions oftheCabinet ofMinisters ofUkraine
"OntheConcept ofEstablishing theNational Statistics ofUkraine andStateProgram onImplementing
International Accounting andStatistical System" of4May1993 No.326and"OnChanges and
Amendments totheStateProgram ofUkraine 'sTransition totheInternational Accounting andStatistical
System" of8August 1995 No.403.
UCGFEA 6-digit nomenclature corresponds completely totheHarmonized System ofthe
Description andCoding ofGoods (1996) andthe8-digit nomenclature oftheCombined Classification
oftheEuropean Union.
UCGFEA isexpected tobeintroduced atthebeginning of1997when thefirstedition isfinished
taking intoaccount proposals from interested ministries (departments).
Question 9
Does Ukraine intend tointroduce tariff headings to8digits? When?
Answer:
SeeResponse toQuestion No.8.WT/ACC/UKR/22/Add.2
Page5
Question 10
What room formanoeuvre infuture tariff negotiations doestheschedule oftariff re-structuring
leave?
Answer:
Theschedule oftariffre-structuring leave possibility tonegotiate bothcustoms dutylevels and
theperiod oftheirtransformation.
Question 11
Thedocuments relate toaPresidential Decree; However, theUkrainian Parliament earlier this
yeargranted itself exclusive competence tosetexcise dutylevels andcustoms dutylevels forthose
products subject toexcise tax.What aretheimplications ofParliament 'sdecisions onthese
documents?
Answer:
Duty rates, established forthegoods liable totheexcise duty, donotexceed margins ofthe
import dutyrates, confirmed bytheDecree ofthePresident ofUkraine "OntheConception of
Transforming Customs Duty ofUkraine for1996-2005 according totheGATT/WTO System" of
6April 1996 No.255/96.
Proceeding fromtheabove mentioned itshould benoted thatthefollowing Laws ofUkraine
of6February 1996No.30/96-BP "OnExcise DutyRates andImport DutyontheTobacco Products",
of7May96No.178/96- BP"OnExcise DutyRates andImport DutyontheEthyl Spirit andAlcoholic
Drinks", of24May1996No.216/96 "OnExcise Duty Rates andImport Duty ontheCertain Means
ofTransportation andTyres forthem" andof11July1996 No.313/96 BP"OnExcise Duty Rates
andImport DutyontheCertain Goods (Products)" which wereconfirmed bytheParliament ofUkraine
donotcontradict theDecree ofthePresident ofUkraine.
Question 12
InthelightoftheParliament 'sdecision, canUkraine guarantee toimplement theresults oftariff
negotiations withWTO members?
Answer:
Yes.Theratification oftheresults oftariffnegotiations withWTO members bytheParliament
willprovide theirimplementation.
Question 13
WewelcomeUkraine'sagreementinprincipletointroducetheChemicalsHarmonizationAgreement
infull.However, theendrates indocument WT/ACC/UKR/22/Add. 1forproducts covered by
thisAgreement donotfully correspond toCHA levels.
Answer:
Theconcept paper isaoffer ofUkraine tostartnegotiations ontariff concessions. Andthe
endratesarethesubject fornegotiations.WT/ACC/UKR/22/Add.2
Page6
Question 14
Wewelcome Ukraine ’sintention toimplement zeroduties forCivil-Aircraft andaircraft parts,
butagain thisintention doesnotappear tobereflected indocument WT/ACC/UKR/22/Add. 1.
Answer:
Theconcept paper reflects general trend ofreducing customs dutylevels forCivil-Aircraft
andaircraft parts inaccordance withtheresults oftheUruguay Round negotiations. The
concept paper isaofferofUkraine tostartnegotiations ontariff concessions. Andtheendrateshave
tobenegotiated.
Question 15
Please indicate toHS6digits which products would besubject tothemaximum rateof70%for
"goods subject toexcise"?
Answer:
SeeResponse toQuestion No.11.
Seasonal Duties
Question 16
CanUkraine further explain thesystem ofapplication ofseasonal duties?
Answer:
Thepossibility oftheapplication ofseasonal duties isingeneral terms defined intheUnified
Customs Tariff ofUkraine. Inthecurrent customs tariff there arenoanyseasonal duties. Detailed
order fortheirapplication isnotestablished anddoesnotexist.
Question 17
DoesUkraine intend tomaintain thepossibility ofapplying seasonal import duties afteraccession?
Answer:
Yes.
Question 18
Weunderstand thatseasonal taxes, when applied, areapplied instead ofnormal import duties.
Areseasonal taxes higher orlower thannormal import dutylevels
Answer:
According tothearticle 10oftheLawofUkraine "OntheUnified Customs Tariff" of
5February 1992No.2097-XII seasonal import duties canbeestablished forcertain goods fortheperiod
notlonger thanthree months starting from themoment ofitsestablishment.
Inanycasevalid ratesoftheseasonal import dutywillnotexceed themarginal levelofthe
import dutyratesconfirmed bytheDecree ofthePresident ofUkraine of6April 1996 No.255/96.WT/ACC/UKR/22/Add.2
Page7
Question 19
Please confirm that, atthelatest bythedateofaccession, Ukraine willapply theMFN rateto
allWTO members andthattariff preferences extended toCISStates willbeeliminated except
where aFreeTrade Agreement within themeaning ofArticle XXIV exists.
Answer:
Yes.Bythedateofaccession, Ukraine willapply theMFN ratetoallWTO members and
thetariff preferences extended toCISStates willbeeliminated except where aFreeTrade Agreement
within themeaning ofArticle XXIV exists.
Question 20
CanUkraine explain theneedformaximum duties of70%foragricultural products, while most
current rates aremuch lower?
Answer:
Taking intoaccount thatthecostofproduction ofagricultural goods inUkraine isveryhigh
andtaking alsointoaccount thatthereisnobothimport restrictions andStatesupport foragricultural
goods inUkraine, Ukraine preserves therightfortheprotection levelonseveral agricultural goods
atthelevelof70%.
Question 21
Could theUkrainian delegation elaborate onthemethods applied todetermine theproposed level
ofthetariff rates andprovide theeconomic analysis pointing tothenecessity ofthehigher lever.
Answer:
Thelevelofimport duties proposed intheconcept paper correspond tothelevelofcurrent
customs tariff andforesees further reduction inaccordance withtheresults oftheUruguay Round
negotiations.
Question 22
Willthenewtariff rates beapplied atthelevel ofbinding orwilltheactual rates applied by
Ukraine belower?
Answer:
Yes,thenewtariff ratesbeapplied atthelevelofbinding orwillbelower.
Question 23
Wewould liketoexpress ourconcern about thecomplexity ofthecustoms tariff restructuring:
- formany products noreduction intheyears 1996-2005 isanticipated
- formany products noreduction isenvisaged until theyear2000.
Perhaps thereduction could beapplied onaproportional basis beginning withthefirstyearof
therestructuring period?WT/ACC/UKR/22/Add.2
Page8
Answer:
Yes,weagree withyou,butfirsttheconcept paper isanofficial offer ofUkraine approved
bythePresident ofUkraine, andsecond theperiod, forwhich there isnoreduction, islinked tothe
necessity forreconstruction ofcertain branches ofnational economy.
Question 24
Itwould alsoseem advisable toadopt thelevelofthetariff rates applied intheyears of1992-1993
asthebaselevel forfinding thetariff rates andfixing volumes oftheminimum market access
quotas foragricultural products.
Answer:
In1992 there wasnonational customs tariff andthetariff introduced in1993 wasbased on
thetariffratesapplied intheconditions ofexistence ofmonopoly forforeign tradewhatisnotacceptable
foreconomy intransition tothemarket economy.
Question 25
Please provide details onthepreferential agreements signed byUkraine withother trade partners
andontariff rates applied toimported goods from these countries? Arethese rates different
thanthethree types (i.e.preferential, full,andspecial) comprised intheUkrainian customs tariff'
Answer:
Ukraine hasthepreferential agreements (freetrade agreements) withtheCIScountries and
Baltic States. Within theframework ofthese agreements theestablished import duties ofUkraine is
at0level.
Question 26
Could Ukraine confirm thattheTariff Concept Paper includes onlydetails ofMFN tariff rates,
anddoesnotprovide details ofseasonal, GSPandother preferential rates?
Answer:
Yes.TheTariff Concept Paper includes theceiling levels ofimport duties forformation on
theirbasis theMFN tariff rates.
Question 27
IsUkraine offering tobinditstariffs atthelevels specified intheAnnex totheConcept paper
orarethese rates intended tobeapplied rates withbindings setathigher levels?
Answer:
Yes,Ukraine isoffering tobinditstariffs atthelevels specified intheAnnex totheConcept
paper.
Question 28
DotheConcept Paper andannex incorporate Ukraine 'sstated intention totariffy non-tariff
measures which apply toarange ofagricultural products (answer toquestion 168in
WT/ACC/UKR/25), orwillthetariffied non-tariff measure components beadded tothelevels
setoutintheannex.WT/ACC/UKR/22/Add.2
Page9
Answer:
No.Ukraine does notintend totariffy non-tariff measures.
Question 29
Werequire responses toquestions notyetanswered relating tothescope ofpreferential dutyaccess
(especially withother CISstates) toenable ustodetermine indetail thevalue ofthese tariff rates.
Answer:
Seetheanswer tothequestion No.26.