Ukraine's Ministry of Economy considers reducing scrap export duty

Ukraine’s Ministry of Economy considers reducing scrap export duty

Due in part to a desire to bring the country legislations into line with World Trade Organization (WTO) requirements and standards, the Ukrainian Cabinet of Ministers recently met to discuss changes to the country's duty on scrap exports, which currently stands at €30/mt. A project is reportedly in the works to gradually reduce the export duty to €18/mt by 2007. The proposal involves an initial reduction from €30/mt to €25/mt in 2006, and then to €18/mt by 2007. Once the Ministry finishes discussing the plan, it will be passed onto the Supreme Rada for final approval. Statistics from the Ministry of Economy show that Turkey accounts for more than 50% of Ukraine's net scrap exports. As such, a bilateral protocol about the access to markets for goods and services was signed with Turkey on 18 November, 2004, under the condition that Ukraine decreases its export duties on scrap metal. Additionally, the current €30/mt duty stands as an obstacle for Ukraine to increase its steel product exports into the EU while the re-exporting of this scrap by countries that have bilateral agreements with Ukraine is becoming more attractive. Ukraine is hoping that the EU will expand the country's quota for steel product exports into the EU. An increase in Ukraine's export quota would help offset any possible loss incurred by reducing the export duty.