January 5, 2009

Ukraine to limit meat trade in early 2009

Ukraine will likely restrict meat trade as the government has drafted two laws seen to reduce imports and limit red meat and poultry through tariff increases above agreed bound rates of the World Trade Organization (WTO), reports the US Department of Agriculture. 

Once it is signed into law by the President in mid-January this year, the drafts may have overlapping provisions aimed at reducing trade in meat products although other non-food products may be affected.

The government says the imposition of these measures is to address Ukraine's problems with the Balance of Payments (BoP). The WTO (GATT 1994) does have a legal provision for addressing BoP problems.

Whether the balance of payments situation actually justifies this trade restriction is unclear.  There has been a significant drop in imports that followed the devaluation of national currencyin October- December of 2008.  According to Ukrainian Government sources the Balance of Trade for 23 days of December 2008 was positive with US$4 billion of exports and US$2.3 billion of imports. Ukraine's national meat producers will be favoured by such a stoppage of imports and consumers will likely face higher prices.  Ukraine's accession to the WTO occurred in May of 2008. 

For more of the USDA report, please click here