UKRAINE LEARNS TO PLAY THE WASHINGTON "FREE TRADE" GAME.

Harsh anti-dumping duties levied by the Department of Commerce, which had threatened to choke off Ukrainian steel exports to the U.S., were finally terminated in late October. By dint of an agreement approved by the U.S. and Ukrainian governments in late September (which was itself the result of seven rounds of negotiations), Ukrainian steel firms will be able once again to sell basic steel products in the U.S. However, although the agreement is likely to be a major boon for Ukraine’s struggling industry, it represents anything but a victory for free trade.

The conflict began in December, 1996, when the U.S.-based Geneva Steel Company and Gulf States Steel Inc. petitioned the Commerce Department for relief from Ukrainian steel imports, which, the American firms claimed, were being sold in the U.S. at "dumping" prices below production costs. The U.S. government agreed, and slapped prohibitive duties ranging from 100 percent for the AzovStal steel firm to 177 percent for the Ilyich plant (both of which are located in Mariupol in the Donetsk basin), to 238 percent for other Ukrainian producers of cut-to-length steel plate. (Eastern European Daily, July 25) This ruling had an impact on some of Ukraine’s largest exporters — AzovStal, ZaporizhStal, and the Ilyich Mariupol Steel Plant were among Ukraine’s top ten exporters in 1996 — and threatened to shut down one of the few branches of Ukrainian industry that had shown significant production increases (20 percent) during the first half of 1997. (InfoBank, July 14, Aug. 27)

The October 25 cancellation of the ruling and the duties (which may have saved as many as 60,000 Ukrainian steel industry jobs) does not represent an unadulterated victory for free trade, however. Instead, thanks to the lobbying efforts of Deputy Minister for Industrial Policy Serhiy Hryshchenko, Ukrainian steel firms have now acquired better market access at guaranteed prices. Ukrainian exporters have agreed to sell A-36 basic-grade steel for a price not to fall below $359 per ton (not including delivery charges); they will be able to sell 158,000 tons of this type of steel (which comprises about half of Ukraine’s total steel exports) annually, as opposed to the 20,000 ton limit originally sought by the U.S. firms. (Kiyevskiye vedomosti, October 30) On the basis of semi-annual consultations, this quota could be raised to 165,900 tons, while price rises are limited to 5 percent. Ukrainian government and enterprises seem to have learned that while selling good products at competitive prices can provide access to the U.S. market, keeping the market position attained is frequently a matter for negotiations among trade bureaucrats.

Opposition Candidate to Run in Kazakhstan’s 2000 Presidential Elections.