EN Official Journal of the European Union CE 88/725

(2004/C 88 E/0746)

WRITTEN QUESTION P-1200/04

by Charles Tannock (PPE-DE) to the Commission

(14 April 2004)

Subject: The progress in Ukraine being recognised by the EU as having Market Economy Status (MES)

The progress in the assessment of the compatibility of the economy of Ukraine with the criteria required by EU antidumping legislation seems to have arrested. This process was started in September 2000 when Ukraine was granted special MES and negotiations commenced in October 2000 in order to obtain full MES. The European Commission has examined as required under customary practice the compliance of Ukraine under a number of Market Economy Status headings, in particular; non-interference by the State in company decision making procedures and asset allocation, clear corporate accounting and independent audit procedures, continuing market distortions carried over from the command economy period during the Soviet Union times, legal certainty to title and bankruptcy procedures in accord with international norms, and the possesion of a floating market driven currency exchange mechanism.

In September 2002 Mr. Prodi met President Leonid Kuchma of Ukraine and assured him that the EC would announce its decision within six months following the provision of extensive answers by the Government of Ukraine on the market status nature of Ukraine's economy. Despite further questioning during the course of the 4th and 6th EU-Ukraine Co-operation Committee and further assurances by External Trade Commissioner Lamy as to the readiness of Ukraine in October 2003, Ukraine still has not had an answer on whether it will be granted full MES. Futhermore, the Ukrainian economy has made further improvements over the last three years. For instance, its GDP has increased by 8,5 % between 2002 and 2003, there is now no state interference into companies' decision making process, equal rights exist for the activity of enterprises regardless of the form of ownership, price regulation is settled almost entirely by free market mechanisms rather than the state and over 90 % share of the market is private, whilst less than 10 % of market is state owned.

Mindful of these objective facts and with the geo-politically driven decision to grant Russia full MES is the Commission deliberately stalling on this decision for political reasons rather than the strict economic criteria required?

Answer given by Mr Lamy on behalf of the Commission

(30 April 2004)

The assessment of whether a country should be granted Market Economy Status for trade defence investigations is a technical analysis, with very precise practical parameters aimed at ensuring that the costs and prices of companies can be relied on for the purpose of trade defence investigations.

It should be noted that the Commission assesses each application for Market Economy Status on its own merits, rather than by comparison with other countries which have applied for it.

Ukraine's official request to the Commission to grant it Market Economy Status in trade defence investigations was received in May 2002. The Commission's preliminary assessment was issued in March 2003. It identified five areas where additional information or further progress was required. Ukraine sent the information requested in three stages, in June 2003, December 2003 and January 2004.

The Member of the Commission in charge of Trade has not given any assurances as to the readiness of Ukraine for Market Economy Status. In fact, the Commission's Trade Defence Services have undertaken to finalise their assessment of progress in the five problematic areas identified in March 2003 during the month of April 2004. This document will then be made available to Member States and to the Ukrainian authorities soon thereafter.

The full Market Economy Status assessment will therefore be completed shortly. In this context, the Commission welcomes the progress achieved by Ukraine in economic reform, which represents a step towards fulfilment of the Market Economy Status criteria. The Commission remains committed, as has always been the case, to grant Market Economy Status to Ukraine as soon as sufficient progress has been made on the issues identified and the technical conditions for this are in place.

It should also be borne in mind that individual Ukrainian companies can apply to receive Market Economy treatment.