EU, Ukraine Sign Deal on Steel

In late July an agreement was signed in Brussels, Belgium between the Ukrainian Government and the European Union on trade in certain steel articles in 2005 – 2006, according to a report by a Ukrainian news agency.

The agreement's conclusion was an event in relations between Ukraine and the European Union, which both formalized the parties' relations in steel trade and created further prerequisites for facilitating access of Ukrainian commodities to EU markets.

The Agreement provides, in particular, for increasing Ukraine's quota for exports of flat-rolled and assorted rolled steel articles to the EU from 730,000 tons to 980,000 tons this year and to slightly more than one million tons next year, given Ukraine's exportation duty on ferrous scrap metal does not exceed 30 euros per ton.

The Agreement also specifies that Ukraine's steps to lower the exportation duty, levied on exports of ferrous metal scrap, will be followed by the EU's moves to increase Ukraine's quota. Besides, if Ukraine abrogates the exportation duty its quota will be increased by 43 percent. In turn, the Ukrainian Government undertakes not to introduce additional restrictions on exports of ferrous scrap metal. Also, the Agreement envisages raises in the Ukrainian quota as Ukrainian operators open new servicing centers in EU member-countries.

The above quantitative limitations do not cover Ukraine's exports of flat-rolled steel and other steel articles, which are meant for shipbuilding, repair and construction of rigs and floating platforms for offshore drilling.

The parties also agree that as soon as Ukraine joins the World Trade Organization as the latter's full-fledged member, steel trade will be completely liberalized.