Brussels, 05/07/2012 (Agence Europe) - The European Parliament has validated three of the four bilateral agreements between the EU and Russia which accompany Russia's accession to the WTO and which are more favourable to the EU27 than they would be under WTO rules.
By adopting in plenary the reports by Pawel Zaleski (EPP, Poland), Inese Vaidere (EPP, Latvia), and Gianluca Susta (S&D, Italy) on Wednesday 4 July, MEPs have given their backing to three of the four bilateral agreements made with Russia in view of its accession to the WTO - agreements on car parts, on raw materials and on trade in services, respectively. The agreement on trade in timber - for which Inese Vaidere is also the rapporteur - should be approved in the autumn.
The agreement on car parts protects European producers of car components from the Russian system of investment in the sector - a system which aims to protect their national industry through measures that will be in force until 2018. These measures give foreign car manufacturers incentives to relocate to Russia and put Russian imports of foreign car parts at a tax disadvantage. According to the terms of the agreement, if the exports of car parts from the EU are lower than 3% per year, Russia will reduce its import duties for car components proportionately.
The agreement on raw materials obliges Russia to consult the EU and negotiate with it at least two months in advance of any plans to increase its export duty for raw materials which are not included in Russia's binding commitments to the WTO, such as wheat, sunflower seeds, tobacco, animal hides, wool and cotton and a large number of rare earths and minerals. Vaidere considers, however, that this agreement only represents a “temporary solution” - on the one hand because it does not cover all the raw materials the EU imports, and on the other hand because it is not sufficiently precise or binding as far as its implementation is concerned and does not provide any bilateral dispute settlement mechanism. The Latvian MEP therefore wants this agreement to be replaced soon with “a legally binding agreement”.
The agreement on trade related to services gives new opportunities to the EU's maritime transport agencies seeking to establish themselves in Russia. It also gives preferential access to people working for European services companies required to work in Russia to set up a company in the country. It lays down a minimum quota of 16,000 work permits a year for this purpose.
The agreement on tariff quotas for the export of Russian wood will increase the supply of timber from Russia, which has agreed to reduce its export duty and offer the EU relatively high quotas for its exports of low-duty timber. The agreement lays down the rules for the application of these quotas and prevents Russia from applying unexpected duty increases. The European timber industry imports nearly 10% of the raw wood it uses, 60% of which comes from Russia. Russia is set to join the WTO by the end of the summer. The lower chamber of the Russian parliament, the Duma, will ratify the accession protocol before 23 July. The protocol was validated by the WTO at the end of December 2011 (see EUROPE 10493 and 10518). The EU is Russia's main trading partner (47.1% of Russia's total turnover from trade in 2010) and is also Russia's top investor (75% of total FDI). (EH/transl.fl)