The safeguard measure will last for 3 years
The Interdepartmental Commission on International Trade (ICIT) has published a decision of 23 April 2021 on the application of a special duty on imports of wires to Ukraine, regardless of the country of origin or export, for a term of three years, according to a publication in the Government Gazette.
The decision will reportedly enter into force 30 days after its publication. The duty will be imposed in three phases: 23.5% in the first, 22.3% in the second, and 21.2% in the third year of application.
A special investigation into the import of insulated wires, cables and other insulated electrical conductors, fiber optic cables to Ukraine was launched on 28 July 2020 upon the initiative of Odeskabel Odesa Cable Plant and Yuzhkabel Plant.
Within the period of the investigation, imports increased by 128.8%, the share of imports grew by 180.4% in total production and by 74.8% in consumption. At the same time, a 30.9% increase in consumption entailed a 7.3% decline in domestic production, a 8.6% fall in sales, and a 38.9% drop in sales margin, attended with a 9.2% decrease in price and a 3% hike in prime cost.
According to the statistics of the State Customs Service, in H1 2021, imports of insulated wires, cables, other insulated electrical conductors, fiber optic cables (code 8544) to Ukraine totaled 30.2 thousand tons worth $310.95 million, 24.6% and 44.9% up respectively. Exports totaled 40.9 thousand tons worth $882.6 million (+ 40.1% and + 57.9% respectively).
The highest share of imports originated from Hungary, Poland and Romania, while the largest exports went to Germany, Poland and Romania. The duty will reportedly apply only to some countries.
The duty imposition was supported by the Ukrcable Association, consisting of 16 enterprises, of which 12 produce cable products. Also, the Ministry of Economy recommended ICIT to impose the duty. The U.S. Chamber of Commerce in Ukraine opposed the decision.
Odeskabel is one of Ukraine’s leading manufacturers of fiber optic cables. The plant produces cable products for LAN networks, telephony and others. The main consumers of its products include Zaporizhstal, ArcelorMittal Kryvyi Rih, and Ukrzaliznytsia (the Ukrainian Railways). In 2020, Odeskabel reported a net loss of ₴27 million.