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13th Dec 2019

EU demands WTO ruling on Russian trade tariffs

  • The EU has called on the World Trade Organisation's dispute panel to rule on Russian import taxes (Photo: Kelly)

The European Commission accused Russia of breaking its trade commitments on Thursday (26 February), urging the World Trade Organisation to arbitrate on illegal import duties on a range of products.

The case - the fourth time the EU has called on the WTO to take action against Russia - relates to import duties slapped on paper products, refrigerators and palm oil, a market which Brussels says is worth approximately €600 million a year.

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”The EU requested today the establishment of a dispute settlement panel at the World Trade Organisation in Geneva concerning Russia's excessive import duties, in particular on paper products, refrigerators and palm oil," the commission said in a statement issued on Thursday (26 February).

The European Commission said that Russia had “continued taxing a number of products across various sectors more heavily than agreed," when it joined the WTO, adding that this “constitutes a violation of one of the key WTO principles”.

The EU executive filed the complaint to the Geneva-based trade body in October 2014, contending that Russia continues to impose a 15 percent duty rate on paper products instead of agreed 5 percent, and a fixed minimum amount for refrigerators and palm oils.

However, a two-month consultation period failed to resolve the issue.

The WTO’s dispute settlement body will discuss the EU’s request at a meeting on 10 March, at which Russia will have the right to object to the establishment of the panel. However, if the EU re-tables its request at the following settlement meeting two weeks later, Russia will be unable to block the creation of the panel.

The WTO has the power to demand legal changes and the payment of compensation as a last resort.

Russia joined the WTO in August 2012 but has since faced a string of complaints from the EU, the US and Japan for imposing illegal tariffs on their goods.

The EU's trade relations with Moscow are at an extremely low ebb, as a result of tit-for-tat trade sanctions. Brussels has maintained travel bans on a number of Russian government officials, as well as ban on bond sales to Russian banks and equipment to Russian oil firms, which it imposed in the summer in response to Russia's role in the Ukraine crisis.

Last week, the Commission said that it was upping its competition investigation into allegations that Russian energy giant Gazprom was overcharging European countries for their gas supplies.

For its part, the Russian government has maintained a ban on all imports of all EU agricultural produce. It has also filed complaints to the WTO over the EU's energy rules and levies on steel and fertiliser products in the past year.

Analysis

Can Europe afford a Russia trade war?

One trade expert has described the EU-Russia sanctions war as economic “mutually assured destruction”, but strategic considerations continue to trump financial problems for both sides.

EU lodges new WTO protest against Russia

The EU lodged its fourth formal complaint against Russia to the World Trade Organisation (WTO) on Friday in the latest round of the trade battle between the two blocs.

Russia to file WTO lawsuit against EU energy laws

Russia is to file its second formal complaint against the EU with the World Trade Organisation (WTO) over the EU's so-called 'Third Energy Package,' according to reports on Wednesday.

EU firms still face barriers despite free trade drive

Many European firms are still subject to discrimination by the bloc’s main trading partners despite a recent drive to liberalise markets, according to an new report by the European Commission.

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