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Published:February 8th, 2008 09:34 EST
World Trade Organization gets bigger

World Trade Organization gets bigger

By Ann Poludenko

The WTO has got a new member. This means that on the world trade market new products will appear as well as price changes for the old ones.

The president of Ukraine, Viktor Ushchenko, and the general director of World Trade Organization, Pascal Lamy, signed an agreement about Ukraine becoming the WTO member.  What changes will it bring to the world trade market? And what does it mean to a new member - Ukraine? 

The World Trade Organization is an international organization made to liberalize international trade. The WTO started to work from the January 1, 1995. There were more than 20 countries-founders. USA was one of them. The organization deals with rules of trade between nations at a near-global level. It is responsible for negotiating new trade agreements, and is in charge of policing member countries’ adherence to all the WTO agreements, signed by the representatives of world trade nation and ratified in their parliaments.

Ukraine became a 152 country member. It took it 14 years to get the membership. Now when it has got it many problems appeared unsolved. The first and the most important one is: what and how to do with the membership?  In governments structures and even in big business corporations there is not enough qualified specialists that knows how the WTO works. This can course that some branches of Ukrainian market will meet new risks it will be unable to deal with. 

“The country –member may get many preferences both for producers and consumers”, - says Ildar Gazizylin, the economist of International center of perspective researches. “ As for Ukraine, it’s Gross Domestic Product may have a 1.7% increase. The investments into national economy will add $3,5 mln. As for the export – it will increase $4 mln. per year”, - adds the economist. But at the same time, as there is no understanding in society of what WTO is and what the benefits of it are -there may probably be “a social war” by  antiWTO lobbies, that exists in the country.

International companies may get into Ukrainian trade market as they will be certain that they are protected by international trade laws that the country accepted. It means the price lowering on some products of this company. For example – sunflower oil. Ukraine is know to be one of the biggest producers of it in Europe. But it was very expensive to export it, because of the export taxes. Now, that the country becames the WTO member this type of taxes will be canceled. The raw materials for oil producing will be exported. Today the price on it on the world market is $1000 per 1 ton.. The experts say it will fall sever percents.

Ukrainine has a strong antiWTO lobby. Why that is so? It’s because there are export-orientated and “close” branches in the country’s economy. For the first one the WTO membership means anti-damping and other restrictions cancel, that were fully used by Western countries. As a result more profits from selling abroad products of this export-orientated branch of the country’s economy.

Unlike ‘close” branches that were fully protected by government and sponsored by it, no one from abroad could interfere agriculture and machine-building industries, now they may be bankrupted by the cheap imported products. “This is for the better. This way there will be formed a free competition on these fields and native producers will have to improve their standards and lover the price”, - says   Ildar Gazizylin, the economist of International center of perspective researches.

Although, it is hard to predict what will be next. As the signing of a membership agreement means nothing until the Parliament of the country ratifies it and accept 11 technical bills that will implement native law-system to international norms.