KIEV: Emergency car import duties imposed by Ukraine in 2012 to safeguard its own auto industry violate global trade rules, the World Trade Organisation said Friday, urging Kiev to lift them. A WTO panel of experts found in favour of Japan, which brought the complaint against Ukraine, ruling that “Ukraine acted inconsistently” with a range of international trade rules, including the 1994 GATT agreement.
Ukraine should “bring its measures into conformity with obligations under those agreements,” it ruled, also urging the country to “revoke its safeguard measure on passenger cars.” Japan brought the case against Ukraine in late 2013, complaining over Ukraine’s decision in April 2012 to deploy what are known as safeguard measures, with import duties of up to almost 13 percent on certain vehicles.
Members of the 161-nation WTO are allowed to use temporary safeguard measures to protect a specific industry from an increase in imports of any product which is causing, or risks causing, serious harm to that sector. But Japan maintained that Ukraine – which joined the WTO in 2008 – did not play by the rules because it failed to notify the trade body about its measures, leaving no time for talks with fellow members. It also claimed, and the WTO panel agreed, that Ukraine failed to justify the imposition of the measures, left them in place for too long, and applied them in a manner which was out of proportion to the impact of imports on the local auto industry. The panel did not find in favour of Japan on all points, however, for instance ruling that Tokyo had not proved that Kiev had failed to progressively loosen the safeguard measure at regular intervals.
Both Ukraine and Japan can appeal the ruling if they do so within 60 days. Disputes at the WTO are often highly complex and technical, and can last for several years, with appeals, counter-appeals and assessments of compliance with rulings. WTO’s disputes settlement body has the power to authorise retaliatory trade measures against a country if it fails to fall into line with its rulings.
