VZCZCXRO6312
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHKV #4576/01 3491202
ZNR UUUUU ZZH
P 151202Z DEC 06
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 0711
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHGV/USMISSION GENEVA 0029

UNCLAS SECTION 01 OF 02 KYIV 004576 
 
SIPDIS 
 
SENSITIVE 
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: N/A 
TAGS: ETRD WTRO ECON PGOV UP
SUBJECT: 12/15 UKRAINE WTO UPDATE 
 
REF: A. YARNELL-KLEIN EMAIL OF 12/13 
 
     ¶B. KYIV 4531 
     ¶C. KYIV 4415 
     ¶D. KYIV 4315 
     ¶E. KYIV 4304 
 
¶1. (SBU) Summary: The Ukrainian Rada (parliament) this week 
adopted another WTO-related law, on scrap metal and steel, 
bringing the total number of adopted laws to 19 out of the 21 
considered necessary for accession.  Local media, however, 
fueled by some GOU officials, are erroneously reporting this 
law to be the last required for accession and the end of the 
Rada's work.  Ukraine's lead WTO negotiator recognizes the 
need for one additional piece of legislation and some fixes 
to laws already adopted, although he is somewhat less firm on 
Ukraine's commitment to develop a framework for biotechnology 
products.  Treatment of U.S. beef and pork imports remain a 
stumbling block for accession.  GOU officials have promised 
that trade will now flow, but Post is still awaiting clear 
evidence that the restrictions on U.S. products have been 
lifted.  Ukraine signed a bilateral Market Access Agreement 
with Taiwan on December 14; Kyrgyzstan is now the sole 
remaining holdout, with no recent progress on these 
negotiations.  End Summary. 
 
¶2. (U) This latest edition in a series of regular update 
cables regarding the status of Ukraine's WTO accession (refs 
B-E) covers the period December 11-15. 
 
Outstanding WTO-related Legislation 
----------------------------------- 
 
¶3. (U) The Rada adopted (in final reading) one more 
WTO-related law on December 13, bringing the total number 
adopted to 19 of the 21 pieces of legislation thought 
necessary for accession.  The Rada passed the new law, "On 
the Export Duty on Scrap of Ferrous and Non-Ferrous Metals 
and Alloyed Steel," to replace an export ban on scrap metal 
with negotiated export duties.  As reported ref A, the 
version that passed contained only ad valorem duty rates, not 
minimum specific rates in price per kilo, and is scheduled to 
come into force only on the January 1 that follows WTO 
accession.  President Viktor Yushchenko has already signed 
seven of the 19 adopted bills into law. 
 
¶4. (SBU) Ukrainian media outlets, citing the Cabinet of 
Ministers press service and senior GOU officials, have hailed 
the December 13 vote as the final required for accession. 
Econ Counselor reviewed outstanding legislation with Valeriy 
Pyatnytskiy, Deputy Minister of Economy and lead WTO 
negotiator, on December 12.  Pyatnytskiy recognized that, 
contrary to media reports, the GOU would have to return to 
one draft law -- "On Value Added Tax (regarding taxation of 
agricultural enterprises)" -- that failed to pass in the Rada 
(ref B).  In addition, Pyatnytskiy admitted that fixes to 
some of the adopted legislation would likely be necessary, 
hopefully as one omnibus package to be worked out through 
consultations with Working Party members.  The Commercial Law 
Development Program's resident WTO adviser told us he 
believes the Law on Foreign Economic Activity, in particular, 
will likely need additional changes. 
 
¶5. (SBU) Econ Counselor also asked about the promised law on 
biotechnology products.  Pyatnytskiy noted that the GOU does 
not formally link this law to accession, since it is a 
bilateral commitment to the USG and not part of WTO 
conformity.  He also argued that the U.S. bilateral commits 
the GOU to develop a biotechnology framework but not 
necessarily to finish its work prior to WTO accession. 
 
U.S. Beef and Pork Exports 
-------------------------- 
 
¶6. (SBU) Pyatnytskiy reaffirmed the GOU commitment to allow 
immediate import of U.S. beef and pork, and recognized that 
trade must flow before discussion of a system audit can 
continue.  He tasked his team to follow up with the 
Veterinary Service and locate the order the Service claimed 
it had sent to Ukrainian port authorities regarding beef and 
pork imports from the U.S.  Ministry of Economy officials had 
received no response from the Veterinary Service as of 
December 15. 
 
¶7. (SBU) Ambassador called Deputy Minister of Agriculture 
 
KYIV 00004576  002 OF 002 
 
 
Petro Verbitskiy, who oversees the Veterinary Service, to 
follow up on December 14.  Verbitskiy assured Ambassador that 
orders had been sent to allow for imports of U.S. beef and 
pork, and asked for a meeting to discuss remaining issues, 
such as system audits.  We plan to meet with Verbitskiy's 
team the week of December 18, when we will again request a 
copy of the alleged order to the ports, and we will emphasize 
that no discussion of system audits can commence until the 
USG sees evidence that trade is flowing freely.  Post 
understands that a trial shipment of U.S. beef liver, 
previously denied entry to Ukraine, is expected to return to 
Odessa port on or around December 26. 
 
Concluding Bilateral Agreements: Taiwan Signs 
--------------------------------------------- 
 
¶8. (SBU) Ukraine signed a bilateral Market Access Agreement 
with Taiwan on December 14.  Kyrgyzstan is now the sole 
remaining holdout who has not signed an agreement with 
Ukraine.  Pyatnytskiy told us there had been no progress with 
Kyrgyzstan's bilateral; Ukrainian negotiators were 
disappointed that the Kyrgyz Minister of Finance decided to 
cancel his expected December 8 trip to Kyiv.  Pyatnytskiy 
told Econ Counselor on December 12 that he hoped to visit 
Bishkek in the near future to continue negotiations. 
Taylor