March 19, 2013 / 4:04 PM / 5 years ago

EU hits out at Ukraine over emergency car import tariffs

KIEV (Reuters) - Irate European Union officials urged Ukraine on Tuesday to withdraw emergency tariffs on auto imports, calling them unjustified and extremely damaging to the EU car industry.

Ukraine imposed new tariffs of 6.5 to 13 percent on auto imports - on top of a regular 10 percent import duty - last week, saying it was trying to protect domestic producers whose output had dropped sharply.

The conflict adds another layer of tension to EU-Ukraine relations, increasing the risk that long-planned deals on free trade and political associations between Kiev and Brussels will not be signed this year, as tentatively planned.

Ukraine imported new cars worth $3.2 billion last year, according to car industry group Ukravtoprom, with Germany among the three leading exporters. The others were Russia and Japan.

The EU, which this month also attacked Ukraine’s plans to raise tariff ceilings on 371 goods it had agreed with the World Trade Organisation, reacted angrily on Tuesday.

“In our view, this measure creates a new trade barrier in a very sensitive sector and will be extremely damaging for EU car exports,” the EU delegation in Ukraine said in a statement.

“We call on Ukraine to reconsider and withdraw this measure.”

It said it had “asked Ukraine for a clear factual justification” but has so far received none.

Ukraine’s First Deputy Prime Minister Serhiy Arbuzov defended the tariff move. “This is normal practice when the state protects its producers,” he told reporters.

Reporting by Olzhas Auyezov; Additional reporting by Natalia Zinets; Editing by John Stonestreet

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