Expanding trade and travel between the U.S. and Ukraine

The U.S. Federal Aviation Administration (“FAA”) conducted a safety assessment of the Ukrainian State Aviation Administration (“SAA”) - the governmental authority that regulates and oversees civil aviation...

In June 2005, the United States Federal Aviation Administration (“FAA”) conducted a safety assessment of the Ukrainian State Aviation Administration (“SAA”) - the governmental authority that regulates and oversees civil aviation in Ukraine, according to an USUBC article forwarded to UNIAN.

 The FAA found that Ukraine`s SAA was not in compliance with ICAO standards for oversight of its airline industry. As a result, the FAA downgraded SAA’s capability to Category II from Category I. 

 Under U.S. regulations, the Ukrainian airline serving the U.S. - AeroSvit Ukrainian Airlines - was allowed to continue to operate its flight from Kyiv to New York, but was not permitted to expand operations to the United States until the SAA addressed the discrepancies. In addition, no other Ukrainian airline may operate to the U.S. until Category I status is achieved.

 As a result, travel and trade between the two countries is now limited.  AeroSvit has indicated an interest in expanding the number of flights to New York and also in adding a non-stop flight to Chicago. 

 Following the downgrade to Category II, the SAA applied to the U.S. Trade and Development Agency (“TDA”) for assistance.  A TDA grant was awarded to the SAA in 2006 and a U.S. contractor was selected to help SAA comply with international safety standards and return to Category I status. 

 The contractor provided the SAA in Kyiv a detailed action plan recommending specific steps for addressing the discrepancies and provided on-site support. However, progress has been particularly slow due to various governmental reorganizations.

 U.S.-UKRAINE TRADE AND TRAVEL

President George Bush traveled to Ukraine in April 2008, as a demonstration of political support for its leaders. In June, Secretary of Commerce Gutierrez signed a Trade and Investment Cooperation Agreement with his Ukrainian counterpart in the Ministry of Economy, Bohdan Danylyshyn.

 The agreement established the U.S.-Ukraine Council on Trade and Investment (“Council”), comprised of government officials. Among other things, the Council is charged with “identifying opportunities for expanding trade and investment…and identify and work to remove impediments to trade and investment between the Parties….” The U.S. Trade Representative’s Office (USTR) chairs the U.S. delegation.

 U.S.-UKRAINE BUSINESS COUNCIL (USUBC) PROPOSAL

The new U.S.-Ukraine Council on Trade and Investment will meet for the first time very soon. In light of the new Council’s mandate to “work to remove impediments to trade,” the U.S.-Ukraine Business Council (USUBC) proposes and recommends to the U.S. delegation - with the support of the U.S. FAA - that they raise this issue and impress upon the Ukrainian delegation the importance of their addressing the discrepancies found by the FAA so that Ukraine may reclaim Category I status as soon as possible.

 Growth in aviation is directly tied to economic development. Addressing the discrepancies and reclaiming Category I status by the SAA will enable Ukrainian airlines to operate at higher levels to the United States and - with a large Ukrainian population in the U.S. and expanded interest from the U.S. business community - to expand trade and travel between the two countries.  

 USUBC makes this proposal fully appreciating that aviation safety is paramount and must not be compromised for any reason.

Source: U.S.-Ukraine Business Council (USUBC), Washington, D.C., Tuesday, September 9, 2008

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