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.