What instruments does the state have to protect Ukrainian businesses

President Volodymyr Zelenskyy announced the launch of a new economic platform, Made in Ukraine, given the trade war between Poland and Ukraine. To implement the announced new presidential economic policy, it would be make sense to apply a mechanism to protect national manufacturers from the import that distort competition in Ukraine's domestic market. Read more about the problems with this mechanism in the article by Olena Omelchenko, Partner, Head of International Trade Practice at Ilyashev&Partners - Business support?

No, haven't heard of it... Why Ukrainian manufacturers are defenceless against imports. Based on the statements about the priority support for Ukrainian producers, the available mechanism for protecting businesses is not even being applied.

We are talking about the only instrument allowed by the WTO agreements and the Association Agreement between Ukraine and the EU, aimed at protecting domestic producers from dumping, subsidised and increasing imports of goods. A national manufacturer can appeal to the Ministry of Economy to initiate a meeting of the Interdepartmental Commission on International Trade (hereinafter - the Commission), initiate a trade investigation, and apply measures to protect Ukrainian goods from imports. As a result, anti-dumping, countervailing, special duties, quotas, or price undertakings with foreign manufacturers or exporters may be applied.

The decision to initiate a trade investigation and apply duties is made by the Commission, not the Parliament, in theory, this should allow for a quick response and assistance to national manufacturers. However, everything is different in practie: as of today, the Commission is not working in the mode required by law and needed by business. Essentially, the Commission has held only one meeting over the past two years where important decisions on the application of anti-dumping measures were made.

This allowed to complete processes initiated even before the full-scale invasion of Russia into Ukraine. Only two reviews of anti-dumping duties are underway: the import of seamless cold-rolled steel pipes from China and reinforcement and rebar from Russia. World practice shows that such reviews are conducted in a short time frame, and the majority of measures are extended if circumstances have not changed significantly.

In both cases, the regular timeframes for conducting the review have been significantly violated. There are also cases of circumventing anti-dumping duties through other countries. Most often they evade paying duties applied to imports of Chinese goods.

Unfortunately, the ministry and the Commission take no action to prevent such situations. Even though such inaction leads to significant underpayment of funds to the state budget and the renewal of harm to the national manufacturer. Protective measures are always associated with political decisions.

And this explains why Ukraine avoids applying measures against its partners: EU countries, the United States, the United Kingdom, or Canada. It is absolutely unclear though why Ukraine does not protect its own manufacturers from cheap imports that harm the Ukrainian industry, from China, India, Malaysia, Pakistan, and most importantly, does not extend measures against imports of goods from Belarus and Russia. Such inaction is inconsistent with national interests.

Under such conditions, national manufacturers can only hope that the situation will change with the new economic policy of President Volodymyr Zelenskyy, and until then, they should rely solely on their own efforts in the fight against cheap, increasing and subsidised imports.

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