Ukraine's "image road show" attracted billions of potential investment dollars

Cancellation of the Jackson-Vannick amendment

The first positive signal to Ukraine came not from the UA, but from the United States. While Yushenko was on his visit to Poland, U.S. senators Richard Lugar and Carl Levin officially submitted a bill to the U.S. Senate calling for the cancellation of the Jackson-Vannick amendment regarding Ukraine and the renewal of normal commerce relations on a constant and unconditional basis. Moreover, the newly appointed and approved U.S. Secretary of the State Condoleezza Rice also stated that she would facilitate the cancellation of this amendment.

The Jackson-Vannic emendment of 1974. ?inherited? by Ukraine from the USSR, foresees that goods imported into the U.S. from countries, where human rights are violated, are subject to discriminating tariffs and taxes. It is worth mentioning that starting from 1992 the effect of this amendment for Ukraine was gradually suspended. So, in this case it is a matter of improvement of the image of Ukraine and its exporting companies. Rather than of economic benefits.

The foreign ministers of countries adopted on January 31 a supplement to the Ukraine-EU Action Plan developed under consideration of democratic changes in the country. Specifically, one of the clauses of this supplement states the readiness of the European Commission ?to accelerate studying the issue? of granting Ukraine the status of a country with a market economy. According to experts? assessment, this can happen as early as February 21 at the session of the EU-Ukraine Cooperation Council. Official Kyiv will only have to formally regulate two last issues dealing with accusations against government intervention in the price-setting process and bankruptcy procedures. Once Ukraine is granted the long desired status, the European Union will no longer be able to apply anti-dumping measures against Ukranian exported goods, which according to estimates of the Ministry of Economy will allow for avoiding losses of around US $50 mn annually.

Besides that, in the opinion of people?s deputy of Ukraine and the vice president of the OSCE Parliamentary Assembly Ihor Ostash, this status ?will help improve commerce quotas for Ukraine, particularly for steel and textile?. EU Commissioner for Trade Peter Mandelson made a statement on the same topic, informing that he sees the possibility of granting Ukraine free access to two markets of the UA, namely steel and textile, in the short term future. In his opinion, the corresponding agreements can be drafted and concluded as early as this year.

Simplifying the visa regime

In addition to the Action Plan, the Europan side has declared its readiness to go to the negotiating table with Ukraine on simplification of the visa regime. This clause still requires specific content, but if is highly likely that it will be no worse than the one the EU is presently negotiating with Russia. To be more specific, the Russian government approved the drafts of intergovernmental agreements with France and Italy about simplifying visa regimes for entrepreneurs, who will now be able to get multiple-entry visas through the Chamber of Commerce as an intermediary. Also, the simplified procedure of granting visas will be introduced for students, postgraduate students and participants of youth, sport, culture and humanitarian exchange programs.

Investments and credits

Talks about investments into the Ukrainian economy were resoundingly heard at the annual World Economic Forum in Davos, Switzerland. In the course of the forum, President Yushenko met with the president of the European Bank for Reconstruction and Development Jean Lemierre. The banker stated that the EBRD is ready to mobilize around I bn euro in credit resources for the Ukrainian economy through the bank?s programs. Meanwhile, around 12 commercial funds in Western Europe and the U.S. are prepared to grant Ukraine another U.S. $1 bn. According to the information of the ex-minister of finance of Ukraine and a member of the NBU Council Ihor Yushko, these funds intend to make portfolio investments into Ukraine?s economy in this amount as early as the second half of 2005. Finally, the aforementioned supplement to the Ukraine?s economy in this amount as early as the second half of 2005. Finally, the aforementioned supplement to the Ukraine-EU Action Plan contains a statement, according to which the European Union is ready to grant Ukraine access to credits of the European Investment Bank (EIB). According to preliminary information, the value of these credits will amount to 250 mn euro, which is 50% of the total sum intended for Russia, Belarus, Moldova and Ukraine.

In conclusion, one should mention the rigidity and vigor in the position of official Kyiv. Specifically, Head of Ukraine?s Mission to the EU Roman Shpek stated that Ukraine was expecting more significant and substantive proposals from the EU. ?Only two out of ten proposals are new, whereas the rest of them simply repeat the positions already developed in the action plan,? Shpek noted. The Ministry of Foreign affairs of Ukraine had taken a similar position. ?Our appraisals are far from being euphoric. We hope that after their final completion of the EU proposals, they will gain more specificity and will make the action plan of more value,? stated the press secretary of the Ministry of Foreign Affairs Markiyan Lubkivskiy. Well, as they say, ?one?s appetite comes when dinner is served.?.

Be that as it may, Ukraine has become the major CIS recipient of western financial aid.. But even more significant than that could be the involvement of Ukraine in projects in European energy, transport, and air space. This would mean that the EU is regarding Ukraine not only as a competitor, but also as a partner, at least in some spheres.