In article answers are provided to questions of the introduction of Ukraine in the WTO: Why the question of the introduction of Ukraine in the WTO is especially actual for agricultural industry? Whether there will be positive consequences for agricultural industry from the accession of Ukraine to the WTO? What main problems on agricultural industry arise at Ukraine during negotiation process? How it is possible to reduce risks for agricultural industry and rural population? On what conditions joining of Ukraine to the WTO will take place?
ACCESSION of UKRAINE To the WTO
(continuation)
Why the question of the introduction of Ukraine in the WTO is especially actual for agricultural industry?
The agricultural industry owing to the specifics belongs to the branch difficult for regulation and reforming. Not casually the branch is allocated to the separate sphere of regulation as within the WTO (the agreement on agricultural industry), and ramkaxES (The general agrarian policy of EU). In Ukraine agrarian reformanachalas with delay in comparison with other branches and still it is not complete that complicates a situation.
In Ukraine responsibility for political decisions in the agrarian sphere is extremely high for the reasons:
• a significant role of branch in economy (in rural xozyajstvevyrabatyvaetsya 13-14 % of gross domestic product, even in lean years – over 10 %);
• scales of social consequences for rural population which makes nearly a third of the population of the country;
• low competitiveness of a selskokhozyaystvennogosektor. Even in years optimum for agricultural industry throughout 1998-2004 not less than a third of agricultural enterprises of Ukraine were unprofitable. Can’t be competitive in modern conditions and small-scale production in personal country farms which develop the most part of agricultural production in the country.
Whether there will be positive consequences for agricultural industry from the accession of Ukraine to the WTO?
Characteristic of advantages which will receive agrarian sector and the agrofood markets of Ukraine, their long-term prospect is. It is necessary to refer big openness of the markets of member countries VTO.TAK to long-term prospects, economists predict growth and stabilization of the world prices honor on all agricultural goods as a result of implementation of requirements of the WTO on gradual decrease in protection of domestic markets and decrease in level of export subsidies. These tendencies will be convenient for the export countries with limited financial possibilities of subsidizing of export to which Ukraine belongs also. Thus, it is possible to assume that thanks to bigger openness of the markets of member countries of the WTO, for exporters of the Ukrainian agricultural products new possibilities in the world markets in the long term will open.
What main problems on agricultural industry arise at Ukraine during negotiation process?
The main problems arise with calculations of tables of internal support of agricultural industry, harmonization of standards in branch of agroindustrial production with norms and WTO requirements, and also with establishment of volume and distribution of the tariff quota to import to Ukraine of sugar raw from a reed.
On May 19, 2006 Ukraine and Australia signed the protocol on the introduction of Ukraine in the WTO. Still Australia remained the most uncompromising country for Ukraine in negotiations on the introduction of Ukraine in the WTO. Signing with Australians the protocol, Ukraine didn’t go on any concessions. In particular, access of Australians on the sugar market in Ukraine was solved on conditions which were offered by the Ukrainian party. A progressive tense in the course of negotiations Australia demanded from Ukraine increase in a quota at a sugar raw import from a reed, demanding decrease in import duty to 30 % with decrease the next years to 10 %.
As a result of protocol signing with Australia Ukraine practically closely came nearer to WTO membership. Now Ukraine needed to sign protocols with Kyrgyzstan and Taiwan.
Besides, in negotiations with Australians the size of agricultural subsidies which Ukraine could apply in the future was problematic. Australia considered that upholding by Ukraine
1 370 mln. dollars a year on support of agricultural enterprises and the base period for calculation of this support (1994-1996) were unreasonable.
As the deputy minister of economy Valery Pyatnitsky who took part in protocol signing noted, "we left everything that defended still – with Australia negotiations went many years". At the same time, according to him, as a result of negotiations on agricultural subsidies with all participating countries (Australia – the main negotiator on this matter), Ukraine reduced the amount of limiting support of agrarian and industrial complex from 1,3 bln. dollars a year to 1,1 bln. dollars.
How it is possible to reduce risks for agricultural industry and rural population?
Distribution of benefits and risks from liberalization of trading modes between participants of the agrofood market is non-uniform. Advantages are distributed in favor of the enterprises of the food industry being leaders on volumes of foreign investments and many of which are in a property of transnational corporations, and also zernotreyder. The last work for a long time at foreign markets, being guided by WTO rules.
In the most unprofitable situation there will be producers of milk, potatoes, vegetables and fruit. Considering that the prevailing part of these products is developed in personal country farms, rural population representing a third of the population of Ukraine, more all will suffer from liberalization of trading modes in domestic market.
The most effective from the point of view of mitigation of negative consequences from joining to the WTO will have the actions directed on support of personal country farms and development of the rural zone. In the rural zone it is necessary to keep formation and development of the market and social infrastructure, serving cooperatives. These actions belong to "a green trunk" to the WTO, their financing isn’t subject to reduction.
On what conditions sostoitsyaprisoedinenieUkrainy KVTO?
It zavisitot results of negotiations. While these conditions aren’t defined, it is difficult to predict precisely possible posledstviyadlya the Ukrainian agricultural industry. A lot of things zavisitot how successfully Ukrainian party can "manage to get" teili others ustupkiso the WTO parties. Ostaetsyapolagatsya on that fact, the chtovdrugy countries with an economy in transition accession process kvtoproshelotnositelno without serious consequences for agricultural producers and agroprodovolstvennykhrynok.
(On materials: Agricultural industry in the conditions of the WTO, Institute of Rural Development).