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Wednesday, August 08, 2001
US moves on Ukraine trade benefits over CD piracy

"...The United States on Tuesday said it will suspend Ukraine's duty-free access to the U.S. market and begin steps to impose sanctions on potentially hundreds of millions of dollars of Ukrainian goods because of rampant piracy of music compact discs and similar products. Like many developing nations, Ukraine enjoys duty-free access to the U.S. market for a list of its exports under the U.S. Generalized System of Preferences. The Bush administration will suspend that duty-free access in the coming weeks, Zoellick said. Ukraine shipped about $40 million worth of goods to the United States under system of preferences in 2000. Much of that was chemicals, minerals and rare gases.

The U.S. music industry estimates it loses more than $200 million annually from pirated Ukrainian discs sold in Eastern and Central Europe and as far away as South America. Ukraine is estimated to have the capacity to produce up to 70 million CDs, video discs, computer software and other optical media products annually, compared to domestic demand of 1 million to 5 million. In an apparent last-minute bid to avoid U.S. action, Kiev pledged in late July to crack down within three months on sales of pirated tapes, videos and compact discs. When former President Bill Clinton visited Kiev a year ago, Ukrainian President Leonid Kuchma agreed to a "joint action plan" to clamp down on the pirates and strengthen the country's copyright laws. Since then, Ukraine has let several deadlines pass without taking significant action..."

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