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U.S. urges Ukraine not to renegotiate its WTO commitments
* Ukraine, using loophole, has moved to raise trade barriers
* Move has sparked barrage of criticism in WTO
* Ukraine says criticism is 'bullying'
KIEV, March 13 (Reuters) - The United States on Wednesday urged Ukraine not to renegotiate its World Trade Organisation commitments, warning the move could trigger a chain reaction and bring down the whole global trade system.
The former Soviet republic, which joined the WTO in 2008, shocked the trade club last September by announcing plans to raise tariff ceilings on 371 goods using a legal loophole, a move met with virtually unanimous opposition.
Denouncing the criticism as "bullying", Ukraine's chief trade negotiator Valery Pyatnytsky said in a newspaper interview this month that Kiev would press ahead with the move.
"We are being told: you have certain rights but you should not exercise them because we do not like that," Pyatnytsky told the Dzerkalo Tyzhnya newspaper.
Reiterating Kiev's official stance, he said Ukraine's right to renegotiate tariff ceilings was protected by Article 28 of the founding agreement of the 157-member body.
The U.S. embassy in Kiev issued a statement responding to Pyatnytsky's comments on Wednesday.
"Ukraine's Article 28 filing, coming a short three years after Ukraine's accession to the WTO, gives the appearance of being a renegotiation of Ukraine's initial accession conditions," it said.
"The number of tariff lines makes this the largest Article 28 filing since the WTO was created. This is not business as usual."
The embassy said more than 100 other WTO members shared Washington's concerns.
"If other WTO members were to follow Ukraine's lead and attempt to renegotiate their accession terms, the WTO system would come under unprecedented strain."
It described WTO members as mountain climbers all tied to each other.
"While any individual climber arguably has the right to untie in mid-climb, doing so places himself and his fellow climbers at heightened risk of a fall," the embassy said.
"A colleague who points this out is not an 'oppressor', as Mr Pyatnytsky would have it, but an interested party calling attention to the danger of an unwise action."
The WTO move has further strained Kiev's relations with the West, which has criticised its handling of parliamentary elections last October and the jailing of former Prime Minister Yulia Tymoshenko.
It also came at a time when Ukraine's economy, which has not yet not fully recovered from a 15 percent slump in 2009, went into a fresh period of recession due to falling steel exports, a poor grain harvest and oil refinery shutdowns. (Writing by Olzhas Auyezov; Editing by Richard Balmforth and Jon Hemming)
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