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How will Market Economy Status and Accession to the WTO Impact the Development of Ukraine's Business Climate?
In December 2005 the European Union granted Ukraine Market economy Status, and there is speculation that the United States Might do the same in 2006. The current leadership of Ukraine aspires to join the World Trade Organization (WTO) in the future.
"Ukraine has been an outsider to the international trade club since its independence in 1991. This was partly due to the economic and political uncertainties prior to the Orange Revolution. With a new government, Ukraine has received wide recognition for its political and economic reforms. In December, Freedom House elevated Ukraine to Free Country Status along with the Baltic States-the only four countries that are considered free among former Soviet Republics. The EU is granting market economy status, and the U.S. is in the final stages of doing the same. We now see new horizons for Ukraine both politically and economically, as those two go hand in hand. I'm positive that these developments will have a direct impact on improving domestic competition in Ukraine, not to mention obtaining far greater market access for Ukrainian goods in foreign markets. We expect that after the EU recognizes Ukraine, there will be a chain reaction of recognizing Ukraine as a market economy throughout the world, which will have far greater positive implications for the Ukrainian economy than are being estimated based only on the EU decision. These decisions, accompanied by the accession into the World Trade Organization, will have an immediate positive impact in terms of foreign direct investment in Ukraine. All these factors combined will make Ukraine a great place to be over the next five to ten years in terms of economic development and growth in people's personal wealth."
Oleg Riabokon,
Managing Partner,
Magisters and Partners
"I think these two steps are extremely important for Ukraine, and especially for the development of its travel and tourism. First of all, it proves that Ukraine is opening its borders in all aspects: economically, politically and even physically; citizens of Europe and the U.S. can now entry the country without a visa. Market economy status will attract new foreign investments to major industries, and that will increase both outgoing and incoming tourism. The development of different companies will increase corporate travel within the country as well as travel abroad. Also, I believe that the tourism sector will finally see direct investment in hotels and conference facilities, and that will in turn develop incoming tourism as well as increase the number of conferences and congresses in Ukraine. Ukraine will become one of the most attractive tourist destinations and will justify expectations and fulfill travelers' needs.
Joining the WTO will give Ukraine access to almost everything in the world: inexpensive capital for market development, professional experience in different business areas, and the latest technology that will help businesses, particularly travel companies serve clients more efficiently. Everything mentioned above will increase GDP growth and the population's income. Once we have more money, we Ukrainians, true to our nature will travel more.
I can say that I am in the right business at the right time. Not many countries can boast of growth in travel and tourism."
Valerya Luyk,
Sky Chamber Travel BTI Ukraine,
Chair Chamber Travel and
Tourism Committee
"From the point of view of intellectual property right (IPR) protection, Ukraine's efforts to join the WTO have proven to be quite effective in improving legislation. In particular, a lot has been done to correct the laser discs issue, as well to make Ukrainian legislation comply with the TRIPS Agreement. At the same time, certain gaps in enforcement of IPR still exist. However, efforts to improve the situation are being taken. It should be noted, in particular, that the system of commercial courts in Ukraine has been quiet effective when dealing with disputes in the IPR sphere. More attention should be paid to customs measures protecting IPR, and to coordination of the activities of the Internal Affairs Ministry, the Customs Service, State Tax Administration, and so on. Summing up, from an IPR perspective, it may be noted that Ukraine’s prospects of joining the WTO appear to be quite positive."
Michaes Doubinsky,
Managing Partner,
Doubinsky&Osharov,
Chair Chamber IPR Committee
"Ukraine's accession to WTO together with market economy status granted by the EU will improve the image of our country as friendly to foreign investments. Those events would require the Ukrainian government to live up to expectations of foreign investors in terms of stability and predictability of legislation (especially in treatment not only of foreign but also of domestic investments) on the one hand, and Ukrainian businesses to become 'more international' in terms of fair practices and growth of their own expertise on the other hand. WTO accession will inspire introduction of new quality standards and safety of products of Ukrainian companies and elimination of political and economic barriers between countries will encourage inflow of new technologies to Ukraine and as a result creation of new jobs.
The expected overall improvement of the Ukrainian economy as a result of accession to WTO and receiving market economy status would be beneficial for our company in terms of new clients and an increased demand for new services and new technologies. Last but not the least the accession to WTO would be a precursor for Ukraine's future accession to the European Union."
Volodymyr Shkred,
Legal Department,
UMC,
Co-Chair Chamber Legal
Committee
January-February, 2006
Commerce
Page 10-11
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