Can Ukraine protect its forest without breaking agreements with the EU?
Moratorium on round timber had both environmental and socio-economic background
Read the original text at eurointegration.com.ua.
Protectionism is reluctantly accepted in the world. However, official statistics of recent years shows the rapid growth of protectionism.
And this fact has its basis, because the world does not stand still. Public policy and business conditions change, new trends emerge, and generally, it necessitates a periodic monitor external obligations of the individual countries.
Of course, this process is not chaotic - the corresponding changes in liabilities occur under certain conditions, circumstances, and in accordance with established procedures.
A striking example: Ukraine introduced a temporary moratorium on the export of timber logs. This decision has been made in terms of predatory deforestation of more than 2.5 million hectares of forest, which went on exports, and lack of raw materials for domestic wood processing companies that were on the verge of closing. Accordingly, the moratorium had both environmental and socio-economic background.
However, some experts believed that the decision was critical, if not hostile. The main argument was limited to the economic provisions of the Association Agreement with the EU, which provides that no party shall adopt or maintain any prohibition or restriction on imports/exports of any goods of the other side.
But in accordance with the provisions of the WTO agreements, there are at least 3-4 mechanisms for implementing this measure.
The critical situation in the forestry sector - reduction of forest cover to 11% in 2015 (the optimum level is 20%) - is more than sufficient reason to adopt a law on temporary restriction of exports of forest. This position is based on the provisions of GATT 1994, in particular articles:
- XI: 2 (a) the possibility of WTO members to temporary prohibit or restrict exports of goods to prevent or relieve critical shortages of goods essential to the exporting country;
- XX (g) the possibility of WTO Members to take measures relating to the conservation of natural resources that are exhausted, if such measures are applied with restraint of domestic production or consumption.
As is known, the provisions of free trade agreements are primarily based on WTO agreements. Accordingly, the parties retain the right to introduce restrictive measures in trade for reasons of security threats to life and health, environment, culture and so on.
On the other hand, we should recognize that procedure introduction of the measure, unfortunately, passed a gross violation of the principle of transparency.
Thus, WTO members are obliged to inform the international community ahead of the adoption of new laws or any changes to existing regulations that significantly affect trade. Despite Parliament’s repeated appeals to the government to officially inform the WTO trade and economic partners of Ukraine about the nature and purpose moratorium, relevant government agencies grossly violated the principle of transparency.
As a result, the international image of Ukraine as a reliable and predictable trade partner suffered a severe blow, the government business and community were in the information vacuum. Unfortunately, lack of domestic consensus on the moratorium creates conditions for external partners to question the legitimacy and feasibility of its implementation.
Moreover, some officials take considerable measures to repeal the moratorium, authoritatively assuring Western partners that it would happen soon. This is a parliamentary-presidential republic, where Parliament rents the government for taxpayers' money to ensure the faithful implementation of the laws.
However, in my opinion, the Constitution of Ukraine is ignored. Recall that under the Constitution, natural resources, including forests, are the property of the Ukrainian people. Accordingly, the Ukrainian nation state delegated authority to ensure implementation of this right. Therefore, the question of a compromise with the European and other external partners currently remains open.
Given that similar bans are implemented in over 30 countries, Ukraine is not a pioneer. On the contrary, we have become another victim of globalization.
Therefore we would like to urge the authorities try to find a political and diplomatic resources to reach a compromise to maintain the moratorium on the export of timber logs and focus on restoring forests.
As for the further development of relations with the EU, we should sit at the negotiating table and offer a number of countervailing measures.
One of them might be Ukraine’s early abolition of import duties on equipment originating from EU countries. This initiative will have a positive reciprocal effect.