Executive Director of the Bleyzer Foundation Oleh Ustenko warns that Ukraine may become a party to litigation regarding an unlawful ban on timber exports as a country that does not fulfill its obligations under the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union.
”Ukraine is a member of the WTO [World Trade Organization], and any export restrictions are unacceptable within its framework. A country that does not comply with such requirements will face the situation when there will be a hearing on its unlawful export restraint in Geneva. The same applies to export duty if we had introduced it on exports of round timber. It`s not allowed for a WTO member to limit exports,” Ustenko said.
According to him, a free trade barrier in the modern world is seen as an archaic thing revealing bad economic policy.
”Today, any European manufacturer can apply on behalf of its association, for example, that of manufacturers of furniture, to the European Commission to challenge the illegal limitations by Ukraine on exports and it will win. And we will have painful image-related losses then. In fact, the Europeans have forgiven us for such behavior during this year of moratorium,” Ustenko said.
He drew attention to the fact that lifting the moratorium on timber exports to the European Union is connected by the European Union to the provision of macro-financial assistance worth EUR 1.2 billion.
”The EU has made a clear statement: Ukraine either removes the restrictions on exports, or macro-financial assistance, which is used by the Europeans as the carrot for Ukraine, is at risk. But if we are not going to fulfill our obligations under the DCFTA with the EU, a question will arise soon: will other commitments be fulfilled,” the expert warned.
He says Ukraine has little time to address the issue of the moratorium as the law banning timber exports is coming into effect at full capacity on January 1, 2017.
”As always, Ukraine thinks it can somehow manage it by saying one thing but doing another. This is a wrong approach. But it still has time to solve the problem with the moratorium until January 1,” Ustenko added.
As reported, in April 2015, the Verkhovna Rada adopted a law to introduce a 10-year ban on the export of raw timber and lumber.
In particular, since November 1, 2015, all types of timber except pine are not allowed to be exported. The full moratorium will be introduced on January 1, 2017.