In August Ukraine might or might not be declared a market economy state
US Ambassador to Ukraine Carlos Pascual has again confirmed that the US will make a concrete decision in late August on granting Ukraine the status of a market economy state. According to the ambassador, Ukraine has recently submitted all the documents required for obtaining the status of a market economy country. These documents are now under close scrutiny.
The European Commission also promises to help Ukraine get this status as early as possible. This was among other things on the agenda of the fourth session of the subcommittee on finance, economics, and statistics of the Ukraine-EU Cooperation Committee held in Brussels on June 6-7.
Market status is an especially coveted goal now that the United States granted it to Russia last week. This will make it easier for Russian companies to solve trade disputes on the American market and boost Moscow’s chances to join the World Trade Organization (WTO). Moreover, the Russians will find it easier to get access to the world’s richest national market. The US decision will make a generally positive impact on the Russian economy. Russian experts claim that from now on, whenever a dumping dispute is being considered, Russia will be able to compare its domestic prices with those American for the same products. In the case of non-market economy countries, reference is made to other economically comparable countries, which opens wide possibilities for arbitrariness. On the other hand, the US can now impose compensating duties on Russian goods if a certain item has been proved to be subsidized by the state.
According to Ihor Burakovsky, director of the Institute for Economic Research and Political Consultations, it is quite realistic for Ukraine to obtain a similar status this year because “the quality of the market economies of Ukraine and Russia is in many respects the same.” Dr. Burakovsky says Ukraine could make two, political and economic, gains in this case. Politically, this means certain US recognition of our successes in the market-oriented transformation of our economy, which will in turn strengthen this country’s position in WTO membership negotiations. Economically, this will first of all reinforce the positions of Ukrainian producers on the US market: American companies will find it more difficult to instigate antidumping proceedings against them. “This does not mean, though, that all such investigations with respect to Ukrainian goods will be stopped: the solution of dumping disputes is just being raised to a more civilized level,” Dr. Burakovsky told The Day.
This viewpoint is also shared by Oleksandr Paskhaver, president of the Economic Development Center, who believes that, if Ukraine enjoys the status of a market economy state, antidumping investigations will be conducted “far more liberally and correctly” because they are aimed at a specific enterprise, not at a country. Yet, Mr. Paskhaver told The Day he was a little doubtful whether Ukraine could be called a market economy country, for quite a lot of our enterprises are being run, overtly and covertly, by the state. Thus, Prof. Paskhaver thinks, if Ukraine gains market economy status, “this will be, to a considerable extent, a political decision.”
