The Arbitration Panel Ruling on Ukraine’s Certain Wood Restrictions under the EU-UA Association Agreement

Abstract

On 11 December 2020, the first Arbitration panel ruling in the European Union’s (EU’s) trade dispute under a bilateral preferential trade agreement was issued. This dispute concerns Ukraine’s export restrictions on raw timber and sawn wood of ten specific wood species referred to in the relevant Ukrainian law as ‘rare and valuable species’ and all ‘unprocessed timber’ for a period of ten years. The Arbitration panel found a violation by Ukraine’s ten-year export restriction on all ‘unprocessed timber’ of Article 35 of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (Association Agreement), while justified restriction on ‘rare and valuable species’ under Article XX(b) of the General Agreement on Tariffs and Trade 1994 (GATT 1994), as applied in Article 36 of the Association Agreement. This dispute was not only interesting as the first usage of the EU’s dispute settlement mechanism, but also because of the interpretation of the arbitration panel of ‘World Trade Organization (WTO)-extra’ obligation on the environment contained in the Association Agreement. The article reviews the case as well as analyses the EU’s claim and Ukraine’s defence. Trade law, Environment, EU law, Trade dispute, Arbitration, Dispute settlement, WTO, Export restrictions, Article XX, preferential trade agreement, timber