The Higher the Office, the More Market-Oriented the Intentions

On April 19, the Ukrainian delegation led by Vice Premier Vasyl Rohovy, attending a Washington session of the US-Ukrainian Economic Cooperation Committee, tried to persuade the United States to offer technical aid and if not to stop then at least to soften antidumping investigations into Ukrainian imports. Yet, experts believe the main subject of these discussions was whether to grant Ukraine the status of a market economy country. It is in this aspect that the two sides must have also discussed macroeconomic stabilization in Ukraine, budget revenue, money laundering, energy, environmental protection, the development of small and medium business, and the investment climate in Ukraine. It is difficult to overestimate the importance of a positive decision on Ukraine’s market status. Experts point out that this will remove the eternal sword of Damocles in the form of antidumping trials, facilitate joining the World Trade Organization, and open access to many world markets. All this means profits for Ukrainian exporters, new jobs, and budget revenues.

The Ukrainian government is clearly aware that Ukraine’s claims to the status of a market economy country will be scrutinized by the US like under a microscope.

As the Ukrainian delegation was settling itself at Washington tables, Kyiv hosted a cabinet meeting, where Minister of the Economy and European Integration Oleksandr Shlapak involuntarily told the truth. He admitted in his speech there was “a very large administrative component” in the government’s inflation policy in the first quarter and said it was inadmissible that prices be brought down by means of administrative measures. “The overall situation should develop the way the economic sector is now developing,” the minister added. He said later that regional leaders attending the meeting had justly reproached the authorities for price formation on the markets of grain, sugar, and dairy products. Mr. Shlapak noted that the farming products price drop in these sectors slashes down the profits of enterprises, which in turn unduly intensifies competition. No rules, such as tax payment, are observed in this case. Ukrainian Prime Minister Anatoly Kinakh also said he disfavored excessive administrative meddling in local price formation, which allowed Mr. Shlapak to promise that the government would adhere to the principles of market-based price formation.