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Ukraine abolished its Safeguard Measures on Motor Vehicles

On September 30, 2015, Ukraine abolished its safeguard measures on motor vehicles.
The Ukraine’s abolition of the measures according to the WTO recommendation has great significance for curbing arbitrary or nontransparent impositions of safeguard measures.

1. Overview

The Government of Ukraine has been imposing additional duties on motor vehicles as safeguard measures (6.46% on vehicles with a 1,000–1,500 cc displacement and 12.95% on those with a 1,500–2,200 cc displacement). It is estimated that these measures have imposed additional duties of approximately 1.9 billion yen annually, taking into account only the import shipments of vehicles directly to Ukraine from Japan, which raised concerns regarding possible adverse impact on Japanese industry.

Based on the government of Japan’s request, the WTO established a panel under the WTO Agreements in March and through the panel meetings, the WTO released the panel report which held that Ukraine’s safeguard measures were inconsistent with the GATT and the SG Agreement.

In response to the WTO recommendation, Ukraine decided to abolish its safeguard measures on motor vehicles from September 30, 2015 as described in the Ukraine’s official gazette publicized on September 12, 2015.

2. Significance

This issue is an important case where the requirements for imposing safeguard measures were clarified by the Panel’s decision and the safeguard measures were judged as inconsistent with the WTO Agreement that resulted in its abolition.

Under such circumstances where the imposition of safeguard measures has been increasing recently in emerging countries, Ukraine’s abolition of the safeguard measures in response to the WTO recommendation has great significance for curbing arbitrary or nontransparent impositions of safeguard measures through the clarifications of WTO rules.

Reference

(1) Relevant METI News Releases

  1. Japan Requests a Consultation with Ukraine under the WTO Agreement Regarding Safeguard Measures on Motor Vehicles
    (News Release on October 30, 2013)
    http://www.meti.go.jp/english/press/2013/1030_01.html
  2. Japan Requested Establishment of a Panel under the WTO Agreement Regarding Ukraine’s Safeguard Measures on Motor Vehicles
    (News Release on February 13, 2014)
    http://www.meti.go.jp/english/press/2014/0213_01.html
  3. WTO Panel Made a Decision that Ukraine’s Safeguard Measures on Motor Vehicles are Inconsistent with the WTO Agreement
    (News Release on June 26, 2015)
    http://www.meti.go.jp/english/press/2015/0626_01.html

(2) Safeguard measures

A safeguard measure is an emergency measure stipulated in the WTO Agreement, under which the importing country’s government is able to impose additional duties or quantitative restrictions against the imported products at issue in order to prevent serious injury to domestic industry from surging imports of such products.

(3) Panels under the WTO Agreement

If consultations between governments fail to settle a dispute, based on a request from the complaining party, a WTO panel (first instance), which is a quasi-judicial third party organization, examines the matter in question and gives rulings regarding its consistency with the WTO Agreement. If any violations are confirmed, the panel recommends correction of the measures. Any party which is not satisfied with the panel rulings may appeal to the WTO Appellate Body (second instance).

Release date

September 30, 2015

Division in charge

  • General information on WTO dispute settlements:
    Multilateral Trade System Department & Office for WTO Compliance and Dispute Settlement, Trade Policy Bureau
  • Information on the automobile industry:
    Automobile Division, Manufacturing Industries Bureau
  • Information on the economic relationship between Japan and Ukraine:
    Europe Division, Trade Policy Bureau

Related Information

WTO

Ministry of Economy, Trade and Industry
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