US trade chief urges quick action on Ukraine trade

WASHINGTON, Mar 7 (Reuters) The US House of Representatives should quickly remove a Cold War provision that governs trade with Ukraine, US Trade Representative Rob Portman said on Monday after signing a pact setting the stage for Kiev to join the World Trade Organisation.

''We are urging them to move as quickly as possible,'' Portman said at a ceremony with Ukrainian Economy Minister Arseniy Yatsenyuk. ''This is a good agreement for both sides.'' The United States and Ukraine ended more than ten years of negotiations last week on Kiev's bid to join the WTO.

However, Congress must give its approval by graduating Ukraine from a 1974 provision known as Jackson-Vanik, which links US trade benefits to the emigration and human rights policies of communist or formerly communist countries.

Congress went through a similar debate in 2000 when it approved ''permanent normal trade relations'' with China in order for Beijing to join the WTO.

The Senate voted in November to graduate Ukraine from Jackson-Vanik in a show of support for Ukraine's reform-minded President Viktor Yushchenko. However, the House has not passed similar legislation.

Now that the bilateral deal with the United States is complete, Ukraine should wrap up its remaining negotiations with WTO members in coming weeks, Yatsenyuk said.

''We need this for economic growth, we need this for economic prosperity and we need this for our bilateral relations,'' Yatsenyuk said.

The US Chamber of Commerce, National Association of Manufacturers and Coalition of Service Industries endorsed the agreement with Ukraine, which requires the former Soviet republic to open its market to more US trade.

''Under the terms of this agreement, Ukraine's average duty on US exports of industrial goods will be 4.6 percent and many key exports will face even lower rates,'' Frank Vargo, vice president of manufacturers group, said in a statement.

Kiev agreed in the deal to phase out tariffs on computers, semiconductors and aircraft products, while reducing tariffs on chemicals to very low levels or zero, USTR said.

Ukraine also promised more access for farm products of US interest, including poultry and animal feeds, and to abide by international standards in its treatment of foreign beef, pork, poultry, fish and biotech products, USTR said.

Ukraine's average bound agricultural tariff will be 11.1 percent upon joining the WTO, USTR said.

Kiev also will open its market to US companies offering services -- including banking, insurance, telecommunications, energy services, distribution, express delivery, engineering and construction, USTR said.

REUTERS VJ RAI0613