Ukraine’s membership in the WTO: advantages and disadvantages The reporter: Tania Marchenko, the Ukrainian academy of banking, Sumy, 3-year student of banking Research supervisor: D.L. Tsiganyuk Language advisor: O.I. Leshchenko

STRUCTURE Background information about the WTO Necessity of Ukraine’s entering the union Predicted advantages and disadvantages Comparison of expectations and reality Our conclusions

Background information about the WTO Formation: January 1, 1995 Headquarters: Geneva, Switzerland Membership: 153 states Official languages: English, French, Spanish Director-General:Pascal Lamy Website: www.wto.int

Background information about the WTO Ukraine became the 152-nd member country of the WTO on May 16, 2008

Necessity of Ukraine’s entering the union The European Union emphasizes on higher possibility of entering its community only for those countries which are members of the WTO; It provides Ukraine with the first integration step – creation of free trade area with the EU; The WTO can carry out the functions of international economic regulator

Necessity of Ukraine’s entering the union The WTO is absolutely new business sphere, business culture, and new philosophy; The WTO membership opens new markets for the Ukrainian products; Ukraine's WTO accession will help to reduce the cost of critical imports from the WTO Members.

Predicted advantages and disadvantages

ADVANTAGES Access to the international trade dispute resolution mechanism Conducting international trade and business Ukraine gains the status of a rightful participant of international trade

ADVANTAGES Import sphere Market of services Bank services Insurance sector Branch of communication and information Status of member of the WTO will help Ukraine to defend its trade interests better in the global arena

DISADVANTAGES Increased imports, which could cause reduction in industrial output, higher unemployment and social tension After entering the WTO Ukraine will be forced to reduce customstariffss in particular on resources

DISADVANTAGES The rules of the WTO regulate the terms of foreign trade only, here the WTO leaves freedom of actions of country-members in the questions of providing guard of health and environment. Insurance sector

Comparison of expectations and reality

Table1. Main macroeconomic indicators of Ukraine in 2004–2010 (growth rates in per cent relative to the same period of the previous year) 2004 2005 2006 2007 2008 2009 2010 Real growth of GDP 112.1 102.6 107.1 107.6 106.3 84.9 104.2 Industrial production 112.5 103.1 106.2 110.2 96.9 108.8 109.7 Investments into basic capital 128.0 101.9 119.0 129.8 97.4 73.1 102.9 Direct foreign investments 170.3 348.2 60.1 168.1 77.9 51.6 111.6 Exports 142.6 107.5 113.2 127.4 135.9 62.5 127.9 Imports 131.3 120.4 122.0 135.4 141.1 55 130.8 Turnover of retail trade ( of legal entities ) 121.9 123.4 126.4 129.5 117.9 95.3 111.7

Consequences of joining the WTO, export The government has improved the legislation according to the WTO’s demands. Besides the export quota on metal production was canceled. It became more difficult to impose anti-dumping investigations against Ukrainian companies. Ukraine activated trade cooperation with the WTO-members thus it allowed the national exporters to broaden sales market of their production. Besides Ukraine increased amount of export of traditional kinds of products.

Consequences of joining the WTO, import 1. Imports to Ukraine are stable and homogeneous for its commodity structure. Energy resources – 25-30 %, equipment and machinery –18-20 %, chemical production – about 14 %. 2. Freer access of goods from the WTO member countries on the Ukrainian domestic market and increasing imports. 3. Import price of natural gas increased by 38% in 2008, but it Is not directly related to the fact that Ukraine accessed the WTO.

Entering the WTO isn’t a mistake, but a huge step in the future CONCLUSION Entering the WTO isn’t a mistake, but a huge step in the future

Thank You !