Most financial analysts have focused their attention on the impact the Ukrainian crisis might have on the Russian economy to the neglect of the Ukraine’s. The Office of the United States Trade Representative, however, contributed a rigorous assessment of Ukrainian trade in a report issued Thursday.
Much of the report was a damning indictment of Ukrainian trade practices. According to its analysis, the Ukraine systematically engages in practices, especially regarding intellectual property rights, that place an undue burden on U.S. commerce and are actionable under section 301(b) of the Trade Act of 1974.
The Ukrainian violations largely fall within three categories. First, the Ukraine has been negligent in paying royalties for the use of intellectual property that belongs to U.S. companies. Second, the Ukrainian government is guilty of copyright infringement involving proprietary software. Finally, it is also guilty of copyright infringement regarding online property.
According to the USTR, the U.S. and the Ukraine have been involved in candid dialogue about these and other trade related issues but, at least as of yet, no final resolution has been reached. Also, the USTR’s report seems not to have had any impact on the Senate Foreign Relations Committee’s decision on Wednesday to pass legislation that disburses as much as $1 billion in loan guarantees to the Ukraine which, coupled with a bevy of sanctions targeting the Russian economy, are designed to deescalate the discord that has unsettled the region. That measure passed with a 14-3 vote.
The legislation also included language meant to overhaul the current financial commitments of the International Monetary Fund, intended to facilitate its assistance of the Ukraine as well. Lawmakers from both sides of the political aisle want the IMF to able to dispense bigger loans to the Ukraine.
Also, the Senate bill is designed to compel President Obama to impose austere sanctions on Ukrainian officials who have violated the human rights of those who protested the rule of Ukrainian President Viktor Yanukovych. Within the bill there is similar language imposing sanctions on Russian officials as well.
Unnamed officials in the Obama administration have been quoted all over the mainstream press warning that the Ukrainian predicament, now devolving into civil war, “will have an enormous cost for the Russian economy” and that U.S. government is “looking at a broad menu of options to curtail our trade and economic relationship.”
Legislators from both political parties angrily denounced Russia’s incursion into Crimea, under the pretense of protecting its own citizens from spillover violence. Some have demanded that Russia’s membership in the G8 group and the World Trade Organization be revoked. Others have suggested that outstanding negotiations with Russia regarding an impending bilateral free trade agreement be suspended. Secretary of State John Kerry warned that “American businesses may well want to start thinking twice about whether they want to do business with a country that behaves like this.”