Ukraine slaps new tariffs on car imports, will irk Japan, EU

KIEV: Ukraine slapped emergency tariffs of 6.5 to 13 percent on imports of passenger cars on Thursday, citing a slump in domestic vehicle production, a protectionist move certain to irritate trade partners in the European Union and Japan.

The government's commission on international trade said in an official notice that the duties would affect passenger cars with engine capacities of 1,000 to 2,200 cubic centimetres.

The new tariffs - imposed on top of regular 10 percent import duties - will come into effect in 30 days time and remain in place for three years, it said in the notice published in the government's official gazette.

The move seemed certain to enhance Ukraine's growing reputation as the new 'bad boy' of the World Trade Organisation, which it joined in 2008.

Last year, the former Soviet republic sparked an outcry in the global trading club when it announced plans to review 371 tariffs previously agreed as part of its WTO accession deal.

"Due to an increase in the volume of (car) imports and the conditions on which imports are made, local producers have been pushed out of the domestic market," the government commission said in a notice published in the official gazette.

The commission said Ukraine's car output had fallen by 79 percent between 2008 and 2010 and there had been complaints from three local producers.

Japan, the European Union, South Korea and Turkey have all previously voiced concerns at the WTO at the likelihood of Ukraine hiking car tariffs.

Under WTO rules, countries are allowed to use emergency import restrictions, known as "safeguard measures", to prevent a particular industry being seriously damaged by a sudden wave of imports.

However, Japan pointed out last May that Ukraine's total car imports had actually fallen between 2008 and 2010.

According to car industry group Ukravtoprom, Ukrainians bought 237,602 new cars last year while car imports reached 204,957 units and were worth $3.247 billion. The three leading exporters to Ukraine were Russia, Germany and Japan.