Trump administration accuses Ukraine of violation of Association Agreement with EU and WTO

The administration of US President Donald Trump accused Ukraine of violating the Association Agreement with the EU and the WTO, noting that references in the Ukrainian draft law “on localization” to allegedly similar American laws are fraudulent.

This is stated in a letter from the American department, which is addressed to the chairman of the profile committee of the Verkhovna Rada and several other Ukrainian officials.

The so-called bill No. 3739 “on localization” changes the rules of state purchases in the field of mechanical engineering.

In the explanatory note, the authors of the draft refer to two current American laws, which allegedly have norms similar to the Ukrainian draft and oblige American state-owned companies to buy American goods.

In the letter, a Trump administration official explains that the American Buy American Act (adopted in 1933) and the American Recovery and Reinvestment Act (2009) do create advantages for goods produced in the United States or in any country of the World Trade Organization (WTO), because under the terms of the WTO, the States must also provide foreign goods or companies with the right to public procurement in their country. This also applies to Ukrainian companies and goods.

“The United States guarantees Ukrainian companies, Ukrainian goods and services equal with American access to public procurement in areas covered by the WTO agreement on public procurement,” the letter says.

Therefore, the localization bill violates Ukraine’s obligations not only within the framework of the Association Agreement with the EU, but also the WTO.

“We understand the need to cope with the economic impact of the pandemic. But this must be done, not forgetting about the principles of market liberalization, which have brought prosperity and progress to both of our countries, ”the White House said in a letter.

RV help

The Draft Law of Ukraine on Amendments to the Law of Ukraine “On Public Procurement”, the so-called Bill No. 3739 “On Localization”, stipulates that in certain types of cars purchased with state funds or funds from local budgets, there must be a Ukrainian component.

From 2021, the minimum degree of localization has been set at 25-45%, and from 2024 – 40-60%. It should be noted that this requirement does not apply to all purchases, but to a relatively narrow group of engineering products for the needs of energy, housing and communal services and transport.

However, the norms stipulated in the draft law directly contradict Ukraine’s international obligations, in particular the Association Agreement with the EU, which contains a separate chapter on public procurement.

So, one of the principles, according to the Agreement, is non-discrimination. In addition, a separate clause states that the description of works, goods and services should not contain a specific place of origin (except for cases when this is justified by the subject of the contract).

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Source: Русская весна by

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