WTO panel rejects Ukraine claims against Russia transit limits

A WTO special panel issued a report on Apr. 5
concluding that Russia did not violate WTO rules by limiting the transit of
Ukrainian goods through its territory. The panel concluded that in placing the
restrictions, the Russian side protected its “essential security interests” in
a time of an “emergency in international relations.” Recall, Russia
was introducing a series of measures to limit the transit of Ukrainian goods
through its territory, which resulted in a plunge in Ukraine’s exports to
Kazakhstan and neighboring countries. In particular, the limiting measures
taken by Russia in early 2016 caused a 46% yoy drop in Ukraine’s export to
Kazakhstan in 1H16.

Alexander Paraschiy: While this ruling does not look positive for Ukraine and can be
interpreted as a diplomatic failure, it will hardly have any economic
implications for Ukraine. Even if the WTO experts had decided that Russia did
something wrong by limiting Ukrainian transit, the Russian side would hardly
have changed its behavior in the short term. All in all, we see the news as
neutral for Ukraine’s trade outlook and economic prospects.