Wednesday

4th May 2016

Russia's first WTO trade dispute targets EU duties

  • Russia has filed its first WTO complaint against the EU (Photo: Holy Trinity Church of Pārdaugava)

Russia has taken aim at the EU, filing its first trade dispute to the World Trade Organisation (WTO) in protest against anti-dumping duties imposed by Brussels.

In a statement on Monday (6 January), the Swiss-based WTO, which arbitrates on international trade, said that Moscow was seeking consultations with the EU over levies on Russian steel products and ammonium nitrate, which is mainly used in fertilisers.

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Under WTO procedures, EU and Russian trade officials will have 60 days to try and settle their differences before further legal action is taken. The WTO has the power to impose either a change of policy or economic sanctions.

The EU says the duties are in place because Russia is selling the goods below their production cost. In its statement, the WTO said that the complaint focuses on how the EU calculates the value of the goods and the level of tariff fees to slap onto them.

The dispute is the first to be initiated by Russia since it joined the WTO in August 2012.

However, Russia is seen by the trade body as one of the main culprits in putting up tariff barriers and other trade restrictions and is itself already subject to two investigations relating to a car recycling tax on foreign cars.

In November, the WTO agreed with an EU request to set up an arbitration panel to decide whether the tax breaches international trade rules. For its part, Japan has also lodged a complaint against the tax which has raised more than €1.3 billion for the Kremlin's coffers.

Russia imposed the tax in September 2012 shortly after agreeing to remove similar tariff barriers as part of its successful bid to join the trade body.

The move also comes amid increasingly frosty relations between Brussels and Moscow.

The European Commission is expected to release a list of formal anti-trust charges against Russian gas giant Gazprom over claims that it has overcharged a number of eastern European countries.

The EU has also condemned Russia's threats of sanctions against Ukraine in the ongoing tug-of-war over the country's economic future which led to the collapse of a trade agreement between Kiev and Brussels.

EU recovery to slow this year

On just 1.8 percent growth, the commission's forecast is less optimistic than before because of an instable global economy and lack of results of EU reforms.

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