Will duty-free access to the US market help Ukrainian metallurgists?

Washington is resuming the GSP, a Generalized System of Preferences that was developed back in the 70s for the poorest economies so that they could export their products to the United States without paying duties. However, in 2013, this program was suspended, and now began to operate from July 29, 2015 again. This program is intended for 106 least developed and developing economies, including Ukraine. Now Ukrainian companies can export about 5,000 products to the United States duty-free.

Ukraine's exports to the United States have always been low and mainly focused on the products of the metallurgical industry. Thus, among the most significant exporters are the Industrial Union of Donbass and Metinvest, which supplies pig iron to the United States; Interpipe exporting pipes to the American market. The rest of the rolled metal products, due to the significant cost of transportation over such long distances, are losing their competitiveness. And now metal warehouses in Ukraine represent a wide range of rolled metal products, for more details see http://dimaks.org/ru .

However, in 2014, Ukrainian exports of steel products to the American market experienced the largest drop in comparison with other goods. Metal sales in the United States continue to fall in 2015, as in the first 4 months of this year, exports decreased by 43 percent even compared to last year. The fact is that the main exporters found themselves either in the ATO zone or dependent on broken logistic ties, which complicates the supply of raw materials and the shipment of finished products. In addition, the price of steel fell in the global market.

As for duty-free access to the US market, experts believe that it will not help Ukrainian metallurgists. Since the duty-free regime applies only to ferroalloys, it does not apply to the export of cast iron, sheet steel, rolled steel and pipes. According to calculations, only 2 percent of Ukraine's ferrous metals exports to the United States fall under the GSP program. Consequently, the duty-free regime will not be very effective for steelmakers in Ukraine.