VZCZCXRO2909
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHKV #4415/01 3341629
ZNY CCCCC ZZH
P 301629Z NOV 06
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 0532
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHGV/USMISSION GENEVA 0018

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 004415 
 
SIPDIS 
 
SIPDIS 
 
GENEVA FOR USTR 
STATE PLEASE PASS TO USTR FOR KLEIN/MOLNAR 
USDOC FOR 4201/DOC/ITA/MAC/BISNIS 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYCK 
STATE FOR EUR/UMB, EB/TPP/BTA, EB/TPP/MTA 
 
E.O. 12958: DECL: 11/29/2016 
TAGS: ETRD WTRO ECON PGOV UP
SUBJECT: 11/30 UKRAINE WTO UPDATE 
 
REF: A. THORBURN-MOLNAR EMAIL OF 11/30 
 
     ¶B. KLEIN-KRAMER EMAIL OF 11/27 
     ¶C. KYIV 4315 
     ¶D. KYIV 4304 
     ¶E. KYIV 4237 
     ¶F. KYIV 4183 
 
Classified By: DEPUTY CHIEF OF MISSION, FOR REASONS 1.4 (B) AND (D) 
 
 ¶1. (SBU) Summary: Ukraine's Parliament continued its 
progress on outstanding legislation for WTO accession during 
this week, adopting five additional laws, four of which 
related to the agricultural sector.  Parliament has now 
adopted 17 out of the 21 required laws.  On the eve of PM 
Yanukovych's visit to Washington, the GOU appears very 
committed to accession, and a bit anxious for affirmation 
that the USG is not trying to synchronize its accession with 
Russia's.  This week's movement on agriculture-related 
legislation highlights the GOU's seriousness on WTO, and 
upcoming meetings in Washington should help focus Ukrainian 
officials on how to address outstanding issues.  End Summary. 
 
¶2. (U) This is the latest edition in a series of regular 
update cables regarding the status of Ukraine's WTO accession 
(refs D-F). 
 
Outstanding WTO-related Legislation 
----------------------------------- 
 
¶3. (U) During the summer, Ukraine had identified 21 pieces of 
legislation and 6 Cabinet resolutions that they believe are 
necessary to meet outstanding commitments to WTO members and 
to bring the country fully in line with WTO rules.  Voting on 
several of these laws continued during the week of November 
¶27.  Parliament adopted (in final reading) five of the laws: 
-- "On the Export Duty on Waste of Ferrous Metals" (to reduce 
export duty rates); 
-- "On State Support of Agriculture" (to regulate 
import-export transactions and clarify terminology); 
-- "On Milk and Dairy Products" (to eliminate export 
subsidies for milk and dairy products); 
-- "On State Regulation of the Production and Sale of Sugar" 
(to eliminate export quotas type B and C from regulation 
mechanisms); 
-- "On Tariff Rate Quota for Raw Cane Sugar Imports" (to 
introduce an annual tariff quota in the amount of 260,000 
tons for raw cane sugar). 
 
¶4. (U) All of the laws passed by large margins.  To date, 
Ukraine's parliament has adopted 17 of the 21 WTO-related 
laws.  Parliament passed an additional law in the first 
reading on November 29 -- "On the Export Duty on Scrap of 
Ferrous and Non-Ferrous Metals and Alloyed Steel" (to replace 
the export ban on scrap metals with an export duty).  An 
additional two draft laws -- one on the taxation of 
agricultural enterprises and the other on motor vehicle 
imports -- have been submitted to the parliament but have not 
yet gone to the first reading.  One WTO-related law, to 
create a framework for the use of biotechnology products, has 
not yet been submitted -- the Cabinet of Ministers has tasked 
the Ministries of Agriculture and Health to draft.  Post will 
send an updated legislation tracker to EUR/UMB via email. 
 
¶5. (SBU) Socialist MP Vitaliy Shibko, Chairman of 
Parliament's Foreign Policy Committee, confirmed to Econ 
Counselor on November 22 that Parliament was fully committed 
to passing as much legislation as possible before PM Viktor 
Yanukovych's upcoming visit to Washington.  Shibko commented 
that Ukraine had, in effect, already made the decision to 
join the WTO and now was turning its attention to helping 
domestic industry face the increased competition that would 
result. 
 
¶6. (C) Some domestic lobbies will continue to fight, however. 
 Tariel Vasadze, a Yulia Tymoshenko Bloc MP who doubles as 
the Honorary President of the Ukrainian Automobile 
Corporation, told Econ Counselor on November 21 that he was 
advocating for 3-5 year transition periods for Ukrainian 
commitments made in "critical sectors" -- not surprisingly to 
include automobile manufacturing.  Econ Counselor cautioned 
that trying to insert any such transition periods could 
reopen the entire negotiation process and sabotage Ukraine's 
accession.  Vasadze replied that his party understood that it 
could not oppose the WTO legislation, but lamented the 
agreements made by prior Ukrainian governments and argued 
 
KYIV 00004415  002 OF 002 
 
 
that the Russians had gotten a better "deal" in its bilateral 
with the United States. 
 
Concerns about Russia 
--------------------- 
 
¶7. (C) Vasadze's comments echoed some media commentary 
following the recent signing of the U.S.-Russia bilateral 
agreement, when several Russian officials claimed that they 
had secured a "better" deal than Ukraine.  Ministry of 
Foreign Affairs Second Territorial Directorate head Anatoliy 
Ponomarenko (protect) asked DCM on November 24 regarding the 
terms of the U.S.-Russian bilateral and asked for 
confirmation that the USG was not seeking to synchronize 
Ukrainian and Russian accession.  (Note: Ponomarenko asked 
that we be very careful not/not to link this inquiry to MFA 
in any conversations we might have on these two issues with 
the PM or his staff.  End Note.)  Drawing on information 
provided in ref B, DCM and Econ Counselor reassured the GOU 
that the USG wanted both Russia and Ukraine to joint but was 
in no way attempting to synchronize the accessions.  Econ 
Counselor also explained that the two countries' bilateral 
agreements with the United States reflected different trade 
interests, but stressed the U.S. bilateral largely reflected 
Ukraine's offer, which dated back to the Kuchma 
administration. 
 
¶8. (SBU) Deputy Minister of Economy and lead WTO negotiator 
Valeriy Pyatnytskiy expressed his concern to Econ Counselor 
on November 29 on the need to move forward quickly. 
Pyatnytskiy said he had recently completed discussions with 
EU reps and was interested in working out remaining issues 
with U.S. officials as soon as possible.  Pyatnytskiy's 
Deputy, Vyacheslav Tsymbal, and Vladimir Gurzhiyev, Deputy 
Chief of the Veterinary Service, met with Ag Attache on 
November 30 to underscore their desire for face-to-face 
meetings in Washington to discuss veterinary-related 
legislation as well as beef and pork certificates (ref A). 
 
Comment: Rada Doing its Part 
---------------------------- 
 
¶9. (SBU) Parliamentary leaders had promised to make quick 
work of the WTO laws when taking up their consideration just 
over a month ago, and Parliament has kept its word.  While 
Working Party members will want to ensure that the versions 
of the laws passed meet their expectations and WTO rules, 
Ukraine is approaching the end of its work on the legislative 
front.  Adoption of four agriculture-related laws this week 
was particularly significant, as political leaders have 
repeatedly stressed that they view the agricultural sector as 
most sensitive.  PM Yanukovych commented on November 30 that 
Ukraine should be looking to adapt "the mechanisms of 
(agricultural) support to World Trade Organization 
standards," further signaling that the GOU is serious about 
moving forward on the most sensitive issues required for WTO 
accession.  Upcoming meetings in Washington with Ukrainian 
officials will be an opportunity to help focus the GOU on how 
to reach the WTO finish line. 
Taylor