Welcome to the U.S.-Ukraine Business Council

OP-ED: By Morgan Williams, President
U.S.-Ukraine Business Council (USUBC)
Novynar weekly magazine in Ukrainian
Kyiv, Ukraine, Thursday, January 31, 2008

At the time when Ukraine starts to live by WTO rules, there will be skeptics who will doubt the accession decision, Morgan Williams believes.

Recently, a petty country, Antigua and Barbuda, with the population below 70,000 challenged the United States, a country with more than 300 million people and the world's largest economy, Morgan Williams, president of the US-Ukraine Business Council, USUBC, writes in the Novynar weekly.

The conflict was about gambling on the Internet. Antigua succeeded in winning the case, and Dec. 21 WTO set a compensation to this country to the tune of $21 million.

This case tellingly illustrates how a WTO membership can benefit such a country as Ukraine, namely, how to get protected against such world giants as the United States, China, India, and Russia.

WTO is not merely a promoter of world free trade - it is also a referee who sets a level playing field in the conflicts between smaller and larger countries.

In my opinion, this is only one of the arguments proving that a successful completion by Ukraine of WTO accession process will mark a milestone in the Ukrainian history in the XXI century. This event primarily indicates that Ukraine has matured to become an important player in the world.

It should be noted that membership in WTO, like in any other organization, entails both advantages and responsibilities.

First, membership in WTO guarantees for Ukraine access to the markets of other member countries. A freer flow of goods and services will mean larger integration into the world economy and will open new and unheard-of possibilities for trade Ukraine could only dream about before. Of course, it will also mean that the Ukrainian market will be much more open for exports from other countries.

Ukrainian producers, safely beyond the reach of foreign rivals before, will now bend over backwards to produce higher-quality goods that are more competitive. Otherwise, they will lose their share of the market.

Those who will pick up the challenge from their rivals and will be able to stand up to it, will eventually see that, by producing better goods for domestic consumers, they will get a confident footing on world markets as the difference between these markets gradually disappears.

The flow of foreign investment has been on the rise over the past several years, but in the run-up to Euro-2012 and many other important developments a substantial increase is needed.

In my view, membership in WTO will become a sort of a guarantee of stability and transparency of the Ukrainian market, something that will result in the growth of trade and foreign investment. According to leading economists, Ukraine needs over $10 billion in annual investments. The WTO membership will allow to realize and even surpass this goal.

With highly qualified workforce, Europe's largest areas of fertile black soil and powerful industrial base, Ukraine badly requires larger integration into world communications and transport networks needed to ensure further growth and stability.

Membership in WTO is badly needed by Ukraine in its wish to act as a bridge between the East and the West. It is also worthwhile to mention that WTO membership excludes the use of such distorted market tools as an export duty and interventions which played a very negative role in the past.

When Ukraine is changing to live by WTO rules, there will be some skeptics who will doubt its decision to join the organization. I would like to stress here that WTO membership is viewed as a sign of quality among mature and weighty trade partners in the world.

Both small and large countries have learned that the positives of membership considerably outweigh the few and insignificant negatives. It has been amply evidenced by the fact that not a single WTO member state has suspended its membership in the organization.

Noting Ukraine's obvious success of joining WTO, we should not forget about the consequent and very crucial step - a free trade agreement with the EU talks on which are to begin immediately after Ukraine joins the WTO. It is in Ukraine's interests to complete the talks next year.

If joining the WTO is a great step ahead, signing a free trade agreement will be a great leap in the same direction.

Morgan Williams serves as President of the U.S.-Ukraine Business Council
(USUBC) in Washington, D.C. (www.usubc.org). He is the Director, Government Affairs, Washington Office, for the SigmaBleyzer Emerging Markets Private Equity Investment Group. He has been active regarding the economic development of Ukraine since 1993.

LINK: http://novynar.com.ua/opinion/19224