Japan formally launched a WTO complaint against Ukraine
last week, marking the second dispute that Kiev has faced since joining the
global trade body five years ago. At issue in the dispute are Kiev’s safeguard
duties on certain passenger cars, which entered into force this past April.
Safeguard rules allow countries to increase duties beyond
agreed limits when an increase in imports caused by unforeseen events threatens
to cause serious injury to domestic producers. Japan maintains that Ukraine
violated WTO rules by failing to notify the organisation’s
Committee on Safeguards in a timely manner, and did not provide enough of an
opportunity for other members to consult on the measure.
Tokyo also claims that Kiev has not justified the
imposition of the safeguard measures, and applied them
two years after the end of the investigation period. Furthermore, the Asian
automobile giant says that the measures were applied at a level beyond what was
needed to protect domestic industry from an import surge.
According to Tokyo’s estimates, the annual losses from
these duties - which range between 6.46 and nearly 13 percent - add up to 1.94
billion yen, or US$19.6 million at today’s exchange rates.
Under WTO rules, the two sides must now conduct
consultations for at least a 60-day period, in an effort to reach a mutually
agreed solution. If they are unable to resolve their differences in that
timeframe, however, Japan can then request that the WTO establish a dispute
panel to review the case.