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Business is against tariff increase on cable and wire products

06/ 04/ 2021
  In March, the Mineconomy recommended that the Interdepartmental Commission on International Trade consider the application of special measures for the import of cable and wire products to Ukraine (insulated wires, cables, other insulated electrical conductors under the codes: 8544 49 20 00, 8544 49 91 00, 8544 60 10 10, 8544 60 10 98, 8544 60 90 10, 8544 60 90 90; fiber optic cables, made up of individually sheathed fibers, under the codes кодами 8544 70 00 10, 8544 70 00 90). The special measures imply increasing a special tariff rate for the period of three years with an annual liberalization of 5%. On the pretext of bringing all of the domestic market participants to equal competitive conditions, the Mineconomy recommends introducing a special tariff at the rate of 23.5% - from the date of application of special measures, 22.3% - 12 months from the date of application of special measures, 21.2% - in 24 months from the date of application of special measures. Meanwhile, the EBA experts point out that such measures could lead to a shortage of cable and wire products on the market and curtail competition. Besides, the proposed measures violate the Ukraine-EU Association Agreements between Ukraine and the EU (non-fulfillment of obligations undertaken by Ukraine, in particular, the Agreement on the Cooperation between Ukraine and the EU in the energy sector). Besides, the introduction of duties may lead to a decrease in the implementation of the investment program by distribution system operators, due to the increase in the purchase price of cable products. It may result in a reduction of investment in the development of grids and energy infrastructure by the DSOs and an increase in the cost of connecting to the grid of distribution system operators. Moreover, those measures can cut the investment flow because of implied significant financial damage to RES investors in Ukraine by reducing the return on ongoing investment objects and delaying their implementation. After all, RES producers are the main buyers and users of a large number of the products in question. At the same time, it will affect informatization and other related industries and may further worsen the countrys investment attractiveness. The situation with RES manufacturers gives the impression that the government tries to throw up roadblocks instead of supporting the business in its work. Therefore, the European Business Association appeals to the Mineconomy and the Government not to apply special measures for the import of wires to Ukraine, regardless of the country of origin and export. The business community hopes that the state will not interfere in market processes and restrict competition in the market.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

In March, the Mineconomy recommended that the Interdepartmental Commission on International Trade consider the application of special measures for the import of cable and wire products to Ukraine (insulated wires, cables, other insulated electrical conductors under the codes: 8544 49 20 008544 49 91 008544 60 10 108544 60 10 988544 60 90 108544 60 90 90; fiber optic cables, made up of individually sheathed fibers, under the codes кодами 8544 70 00 108544 70 00 90). The special measures imply increasing a special tariff rate for the period of three years with an annual liberalization of 5%.

On the pretext of bringing all of the domestic market participants to equal competitive conditions, the Mineconomy recommends introducing a special tariff at the rate of 23.5% – from the date of application of special measures, 22.3% – 12 months from the date of application of special measures, 21.2% – in 24 months from the date of application of special measures.

Meanwhile, the EBA experts point out that such measures could lead to a shortage of cable and wire products on the market and curtail competition. Besides, the proposed measures violate the Ukraine-EU Association Agreements between Ukraine and the EU (non-fulfillment of obligations undertaken by Ukraine, in particular, the Agreement on the Cooperation between Ukraine and the EU in the energy sector).

Besides, the introduction of duties may lead to a decrease in the implementation of the investment program by distribution system operators, due to the increase in the purchase price of cable products. It may result in a reduction of investment in the development of grids and energy infrastructure by the DSOs and an increase in the cost of connecting to the grid of distribution system operators.

Moreover, those measures can cut the investment flow because of implied significant financial damage to RES investors in Ukraine by reducing the return on ongoing investment objects and delaying their implementation. After all, RES producers are the main buyers and users of a large number of the products in question. At the same time, it will affect informatization and other related industries and may further worsen the country’s investment attractiveness. The situation with RES manufacturers gives the impression that the government tries to throw up roadblocks instead of supporting the business in its work.

Therefore, the European Business Association appeals to the Mineconomy and the Government not to apply special measures for the import of wires to Ukraine, regardless of the country of origin and export. The business community hopes that the state will not interfere in market processes and restrict competition in the market.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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