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TWN Info Service on WTO and Trade Issues (Dec10/03)
1 December 2010
Third World Network

Ukraine withdraws panel request in cigarette, alcohol dispute
Published in SUNS #7046 dated 24 November 2010

Geneva, 23 Nov (Kanaga Raja) -- Ukraine, at a meeting of the WTO Dispute Settlement Body (DSB) on Tuesday, announced that it was withdrawing its request for the establishment of a panel to examine measures imposed by Armenia affecting the importation and internal sale of cigarettes and alcoholic beverages from Ukraine.

The request for the establishment of a panel by Ukraine was on the agenda of the DSB for the second time, and panel establishment would have been automatic in this second instance, if Ukraine had not requested the removal of the item from the agenda of the DSB, as it did.

Ukraine also told the DSB meeting that it reserved the right to bring the panel request back on the agenda for the next meeting of the DSB, scheduled to take place on 17 December. If it does and seeks a panel at that time, the establishment of a panel will be automatic.

Ukraine had made a first request for the establishment of a panel against Armenia at a meeting of the DSB on 25 October. At that meeting, Armenia had blocked that panel request.

Also at that DSB meeting, Ukraine had complained that Armenia had failed to reply to Ukraine's request for consultations, which is the first step to resolving a dispute, the failure of which could lead to a first request for the establishment of a panel.

Ukraine however informed the DSB meeting of 25 October that official consultations between itself and Armenia were finally held only in recent days (leading up to that DSB meeting). (See SUNS #7027 dated 27 October 2010).

The complaint brought by Ukraine against Armenia concerned Armenia's imposition of higher tax rates on imported cigarettes than on like domestic products, pursuant to its Tobacco Charges Law; the collection of customs duties on imported cigarettes pursuant to the same law in excess of those set forth in Armenia's Schedule of Concessions; and the imposition of higher excise tax rates on imported alcoholic beverages than on like domestic products, pursuant to its Excise Tax Law.

Ukraine had considered Armenia's Tobacco Charges Law and any relevant amendments, replacements, and related or subsequent measures implementing such law, to be inconsistent with Armenia's obligations under Articles III: 1, III: 2, first and second sentence, and III: 4 of the GATT 1994, and paragraph 1.2 of the Protocol of Accession of Armenia to the WTO (WT/L/506, 17 December 2002), that incorporates by reference the commitments set out in paragraph 72 of the Report of the Working Party on the Accession of the Republic of Armenia to the World Trade Organization (WT/ACC/ARM/23, 26 November 2002).

Ukraine had also considered Armenia's Excise Tax Law, any amendments, replacements, and any related or subsequent measures implementing such law to be inconsistent with Articles III: 1, III: 2, and III: 4 of the GATT, as well as with paragraph 1.2 of the Protocol of Accession of Armenia to the WTO that incorporates the commitments set out in paragraphs 70 and 72 of the Report of the Working Party on the Accession of the Republic of Armenia to the World Trade Organization. (See SUNS #7027 dated 27 October 2010).

At the start of the DSB meeting on Tuesday, Ukraine read out a statement saying that in light of the fact that Armenia has recently intensified contacts with Ukraine as regards consultations on the matter, it sincerely expects Armenia to propose solutions soon, which will eliminate the discriminatory regime for the goods concerned and ensure Armenia's compliance with the WTO obligations.

Ukraine requested the agenda item concerning its request for the establishment of a panel against Armenia be removed from the current agenda "without prejudice to the right of Ukraine to bring it back before the next meeting for its second consideration by the DSB in case the Parties fail to reach an agreement and resolution of the matter is not possible." +

 


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