Wednesday

20th Mar 2019

EU lodges new WTO protest against Russia

  • The EU has lodged a complaint with the WTO against Russian import duties, but says it is not connected to other trade bans. (Photo: malyousif)

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.

Brussels' ire is focused this time on import duties slapped on paper products, refrigerators and palm oil, a market which it says is worth approximately €600 million a year.

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The European Commission said that Russia was continuing to levy certain products at much higher rates than it had agreed when joining the WTO.

"The non-respect of tariff commitments raises also a systemic concern as it constitutes a violation of one of the key WTO principles," it added.

Speaking on Friday (31 October), a Commission trade spokesman said that the new case bore "no relation" to the ongoing Russian ban on the import of EU food. "We've been trying to reach an agreement (with Russia) for months," he added.

Officials now have 60 days to seek to thrash out a compromise. However, past experience suggests that the two-month window is unlikely to produce an agreement, with an impasse likely to lead the EU to demand a WTO arbitration panel to rule on the case.

Russia joined the Geneva-based WTO, which arbitrates on world trade, 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.

For its part, Moscow has also filed WTO complaints against the EU's energy rules and levies on steel and fertiliser products in the past twelve months.

The EU's trade relations with Moscow have deteriorated from frosty to almost non-existent during recent months.

This summer an EU ban on bond sales to some Russian banks and on sales of high-end technology to Russian oil firms, in response to Russia's role in the Ukraine crisis, prompted Moscow to hit back by imposing a ban on all imports of all EU agricultural produce.

The commission forecasts that the respective trade bans will knock between 0.2 and 0.3 percent off the EU's economic output this year and next, but expects that the Russian economy will be hit harder, seeing its growth rate cut by 0.6 percent and 1.1 percent in 2014 and 2015 respectively.

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.

WTO to decide on 'illegal' Russian car tax

The WTO will decide later this month whether to set up an arbitration panel on what the EU described as an "illegal measure" by Russia against the bloc's car industry.

EU demands WTO ruling on Russian trade tariffs

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

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