Vadym Shestakov, LL.M., associate, and Kateryna Nikipelova, junior associate at PARITET law firm, commented on China-Raw Materials dispute that was considered by WTO Dispute Settlement Body on the pages of the Yuridicheskaya Praktika (Legal Practice) newspaper.

Grain "games" with the WTO: "Interpretation of Article XI: 2 (a) General Agreement on Tariffs and Trade (GATT 1994) in the decision of the WTO Dispute Settlement Body (DSB) is really indicative for Ukraine, because it is the exception in regard to export restrictions" that are temporarily applied to prevent or weaken a critical deficiency of food or other goods that has big significance for the export party", provided by the mentioned subparagraph of Article XI, to which the Government of Ukraine actually refers to explaining the establishing of quotas on grain exports in 2010.

The position of DSB on the application of this exception in cases of export restrictions imposed by China on the key metallurgical and chemical industry resources is that “a critical deficiency” within the meaning of the article is the situation when non-application of export restrictions can lead to the very difficult consequences for the economy or a crisis. In addition, the burden to prove these consequences lies on the country, which applies such restrictions.

WTO DSB decision with respect to China indicates a very narrow interpretation of paragraph 2 (a) of Article XI of GATT 1994, as well as loads of evidence to be provided by the state in regard to the use of export quotas. After the quotas on grain exports in Ukraine expired there were introduced export taxes at a rate of 9% for wheat, 12% corn and 14% for barley. Since actually the export tax on grain would have a similar effect as quotas, the question remains whether such tax procedures (that formally do not contradict Article XI of GATT 1994 Agreement) cause problems for Ukraine in its relations with the WTO. "