RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/UKR/6/Add.5 
21 September 2005 
 
 (05-4177) 
Working Party on the 
Accession of Ukraine Original:   English 
 
 
 
ACCESSION OF UKRAINE 
 
Questions and Replies on Domestic Support and  
Export Subsidies in the Agricultural Sector  
 
Addendum  
  
 The following submission, dated 5 September 2005,  is being circulated at the request of the 
Delegation of Ukraine. 
  
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 WT/ACC/SPEC/UKR/6/Add.5 
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 - General Comments 
Question 1 We would like to thank Ukraine for recent responses (WT/ACC/UKR/130 of June 2005 and 
revised tables WT/ACC/SPEC/UKR/1/Rev.10 of June ).  We support Ukraine's accession on the 
basis of appropriate commitments on market access and conformity with WTO rules.  
Answer:
 
The whole process of WTO accession is based for Uk raine on the principles of full compliance with 
the WTO rules and procedures as put in writi ng in the WTO plurilateral agreements.   
- Use of local currency (Hryvnia) and US Dollars (US$) 
Question 2 
We request Ukraine to present their domestic support commitment values in local currency 
(Hryvnia) only.  This reflects the currency in whic h domestic prices are pa id to producers and is 
standard accepted practice amongst WTO Members and we expect all acceding countries to 
conform to this standard.  
Answer:  
The use of local currency for the purposes of unde rtaking the domestic support commitments is a 
standard practice for the WTO Member countries w ith the stable local currency.  There are two 
reasons why the AMS computations for the years 1994 through 1996 are provided in US dollar.  Firstly, 1996 was the year of the monetary reform in Ukraine, when the current national currency - 
Hryvnia - was introduced and replaced the old Uk rainian "Karbovanets" cu rrency (Order of the 
President of Ukraine No. 762 "On Monetary Reform  in Ukraine" of 25 August 1996).  And, secondly, 
the inflation rates were extremely high during 1994 and 1995.  For the computation purposes we used 
the aggregate annual official exchange rates for Ukrainian "Karbovanets" (for the years 1994 and 
1995) and Hryvnia (for 1996) to US dollars as set by the National Bank of Ukraine (aggregate annual 
rates). 
The wording of the Agreement on Agriculture and document WT/ACC/4 provides for the notification 
of the monetary value of a domestic support measure , but there is no requirement in either of these 
documents as to the use of foreign or local curre ncies for that purpose.  For example, Colombia, 
Lithuania, Poland and some other Member-count ries undertook domestic support commitments in 
US dollars.  
- Base Period 
Question 3 
We strongly encourage Ukraine to commit to using the 2000-200 2 period as Ukraine's base 
period. This is a more recent and representative period than 1994-1996. 
Answer:
 
The WTO practice of conducting the negotiations on accession allows the countries to enjoy a certain 
degree of freedom in selecting the "base" period.  The reference made as to the selection of "the recent 
and representative period" elected as a base period is not reflected in writing in the wording of the  WT/ACC/SPEC/UKR/6/Add.5 
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 Agreement on Agriculture as approved by the WTO Members on a plurilateral basis.  Ukraine 
believes that it is not in full compliance with the pr inciple of "transparency" which is the fundamental 
principle of the WTO.   
The information related to the le vels of support in the years 2000 through 2002 has been provided 
based on the request of member countries to obt ain the means of monitoring the execution of 
domestic support programs during the post-base period year s.  Ukraine also provided the justification 
of why it had originally elected the years of 1994  through 1996 as a base period and why it was not 
acceptable for Ukraine to elect the latest calendar three-year period as a base period in the "Position 
Materials on the Scope of State Support Necessary fo r the Realization of the Strategy of Ukraine's 
Agriculture Development" document as presented in Annex 11 to the document 
WT/ACC/UKR/110/Add.1 of 24 October 2003.  
We ask members to take into consideration the ar guments presented in that document which put into 
perspective the problems Ukraine faces with its ag riculture.  We also ask to support the Ukraine's 
position at the plurilateral negotiations  on domestic support of agriculture in Ukraine.  We believe that 
Ukraine's position reflects the arguments of a country  with its economy in transition from the planned 
to a market oriented economy. 
Ukraine also wishes to explain its hope that when  the WTO reaches the final agreement within the 
framework of the new round of its plurilateral nego tiations on agriculture support it will take into 
account the economy-in-transition peculiarities of ot her countries like Ukraine.  This will allow 
Ukraine to stick to its position in respect to the selected base period.  
- Supporting Table DS:5 
 - Averaging for product specific AMS; negative values  
Question 4 
On negative values, we would like to thank Ukra ine for amending its calculations to equate 
negative AMS values to zero. 
In calculating the average for product specifi c AMS, where the Ukraine has only provided 
support in one year out of the three year period, we note that the Ukraine has used this one 
year's support and equated it as the average fo r the period.  For example, cattle live weight 
(page 9) only received support in 1994.  Support in 1995 and 1996 was zero.  The Ukraine has used the support provided in 1994 as the average  for the period 1994-1996 instead of averaging 
this support over the three year period.  Co uld the Ukraine please amend the support to 
sunflower seed, sugar beets, cattle live weight, pi gs live weight, poultry live weight, milk whole 
milk, eggs and wool to accurately refl ect the average over a three year period. 
Answer:
 
Ukraine has averaged the support provided in 1994 over the three year period 1994-1996 (see the 
previous version of tables in the document WT/A CC/SPEC/UKR/1/Rev.9, page 9).  In the document 
WT/ACC/SPEC/UKR/1/Rev.10 you cannot see such a pproach in a result of equating negative AMS 
values to zero.  For sunflower seeds total mark et support for 1994 is equal US$ 2.8 million, but 
average market support for 1994-1996 years is equal US$ 0.9 million.  WT/ACC/SPEC/UKR/6/Add.5 
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  - External reference price
 
Question 5 
We note in Supporting Table DS:5 for period 1994-1996, column 5, page 9, that the external 
reference price for sugar beet is notified in US do llars, yet according to footnote 13, the external 
reference price is based on one unit of the exported  product.  In this case, Ukraine does not need 
to use US dollars, as its external reference price is calculated on its own export price.  Could 
Ukraine please re-calculate and notify market pric e support for all products in local currency.  
Further, can Ukraine please provide details as to how it calculated the external reference price 
for sugar beet. 
Answer:  
Ukrainian Custom collects export prices of exported fr om Ukraine goods in US dollars (delivery fob).  
Ukraine cannot notify market price support for th e years 1994 through 1996 in the local currency.  
The 1996 was the year of the monetary reform in  Ukraine, when the current national currency - 
Hryvnia - was introduced and replaced the old Uk rainian "Karbovanets" cu rrency (Order of the 
President of Ukraine No. 762 "On Monetary Reform in Ukraine" of 25 August 1996).   
 - Eligible Production  
Question 6 
We request again that Ukraine reflect total leve ls of agricultural production against column 6 
"eligible production". Government interventi on effectively provides price support for all 
production, not just the quantity purchased by th e government for intervention.  This is because 
intervening to remove marginal quantities from  the market, also supports prices for the 
remaining quantities that are sold on the ma rket. Ukraine should amend its notification 
accordingly. 
Answer:  
Paragraph 8 of Annex 3 to the Agreement On Agricu lture contains a definition of "the quantity of 
production eligible to receive the applied administ ered price" rather than the "total production". 
Therefore, the choice of the amount of production procured by the state in case of Ukraine over the 
period of 1994 – 1996 as eligible production appears to be correct.  Explanations of specific features characterizing this mechanism pertinent to a transition economy were on numerous occasions provided by Ukraine. 
The figures of State procurements presented by Uk raine in DS:5 Table as the volumes of "eligible" 
production equal the volumes of production of goods w ith certain quality charact eristics eligible to 
receive the applied administered prices.  The admini stered prices were applied for the products with 
certain quality characteristics based on wh ich class and sort they belonged to.  
We accept the statement made to the effect that by taking marginal quantities off the market, support 
is provided for the remaining quantities that are sold on the market. One should still take into 
consideration the peculiarities of Ukraine's econom y-in-transition.  Certain volumes of production 
cannot be treated as the commodity output.  For instance, the marketability of the grain products 
produced in Ukraine fails to exceed  50 per cent.  Farmers themselves consume a share of non-market 
(commodity) output of certain products, and so this share never reaches the market.  Sufficient  WT/ACC/SPEC/UKR/6/Add.5 
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 volumes of products are given or sold to the farmer s at prime cost of production.  These volumes of 
production are not affected by the prices set by th e government in an administrative manner.  
 - Support for sugar  
Question 7 
In supporting table DS:5 for 2000-2002 (page 39), we note that the external reference price is 
based on the export price of 1 tonne of white sugar according to Paris Contract No. 5 fob, 
European ports, London Monthly price for refi ned sugar.  As Ukraine uses the external 
reference price of refined sugar, can Ukraine please amend its supporting tables to portray 
support to refined sugar as opposed to sugar beets.   
Answer:  
Through external reference prices of refined sugar in Ukraine, revenues of producers of sugar beets 
are supported.  This is why "sugar beets" instead of  "refined sugar" are indicated in column 1.  
- Supporting Table DS:9 
Question 8 The "Partial reimbursement to producers for pur chases of elite seeds" and "State program for 
selection in stock-breeding" programs appear to be product-related and therefore do not 
appear to fall into the category of non-produc t specific support.  We suggest Ukraine notify 
under product-specific AMS. 
Answer:
 
These programs have been included as non-product support in the period of 1994-1996 due to the 
impossibility to allocate them among specific products.  These programs are considered by Ukraine as 
"input subsidies".  
Question 9 
Ukraine has listed "cancellation of interest on commercial bank agricultural loans" 
WT/ACC/SPEC/UKR/1/Rev.10 page 20), "writing off budgetary loan advances" and "writing off tax arrears" (WT/ACC/SPEC/UKR/1/Rev.10 page 46-47) to a number agricultural 
enterprises as non-product specific AMS.  Can Ukraine please provide more information on the 
circumstances for these debt cancellations and whet her it expects to have to continue to use 
these measures in future? 
Answer:
 
All circumstances for these de bt cancellations are provided in the notes for each supporting 
programme in the tables.  
- Supporting Table ES:1 - Export subsidies We welcome Ukraine's commitment not to apply or  undertake in the future, agricultural export 
subsidies as defined in Article 9, paragraph 1(a) to (f) of the Agreement on Agriculture.  WT/ACC/SPEC/UKR/6/Add.5 
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 - Working Table 1:  Value of Agricultural Production  
Question 10 Please supply value of agricultural producti on in local currency and not US dollars.  
Answer:
 
It is impossible in the case of Ukraine with regard to the Ukrainian monetary reform. 
See also answers above. 
The wording of the Agreement on Agriculture and document WT/ACC/4 provides for the notification 
of the monetary value of a domestic support measure , but there is no requirement in either of these 
documents as to the use of foreign or local curre ncies for that purpose.  For example, Colombia, 
Lithuania, Poland and other member-countries undertook domestic support commitments in 
US dollars.  
 
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