US Grants Ukraine Market Economy Status

U.S. Commerce Deputy Secretary David Sampson praised Ukrainian government for substantial progress in implementing economic, social, legal, and institutional policies; and announced that Ukraine is now a market-based economy. He discussed various trade issues, including Ukraine's accession to the WTO and prospects for expanding U.S.-Ukraine commercial opportunities. The landmark decision on the part of the USA follows the meeting of President George Bush and President Victor Yushchenko in Washington D.C., and the European Union's official recognition* of Ukraine as a market-economy country, announced by British Prime Minister Tony Blair in December 2005.

"I congratulate all Ukrainians for making positive changes and achieving market economy status," said David Sampson. "This determination reflects the impressive economic developments that have occurred in Ukraine over the past several years. Today's announcement underscores our commitment to expanding our bilateral economic relationship that will lead our two countries to peace, prosperity and stronger commercial ties."

Mr. Sampson assured: "We are committed to working together to achieve Ukraine's accession to the World Trade Organization." He concluded that "As a member of WTO, Ukraine would become partners in an ever-expanding group of nations that favor democratic and free-market economic values. This would open up potentially vast opportunities for local businesses, and would attract major industrial players."

Ukraine's Foreign Minister Borys Tarasyuk predicted that the designation should help Ukraine in its bid for WTO membership, potentially protect Ukrainian companies from antidumping sanctions, increase Ukraine's credit rating, encourage foreign investment, and provide access to lower borrowing costs.

President Victor Yushchenko said the U.S. decision showed "the world that [it] recognized changes in Ukraine and the irreversibility of the reforms that were launched."

The Commerce Department considered six criteria in determining the market or non-market status of Ukraine's economy. Those criteria included the extent of currency convertibility, free bargaining for wage rates, foreign investment, government ownership or control of production, government control over the allocation of resources, and other appropriate factors.

^*NOTE: The European Union's political decision on recognizing Ukraine a market economy was announced on December 1, 2005 during the Ukraine-EU Summit in Kyiv. European Commission President Jose Manuel Barroso said 48-million-strong nation's future lay with Europe, and Ukraine had "come a very long way in a very short time." The European Union's Council of Ministers officially recognized Ukraine as a market economy on December 21, 2005, and Ukraine officially acquired this status on December 30, 2005.