Brussels, 04/11/2014 (Agence Europe) - On Friday 31 October, the EU notified the WTO secretariat of a request for consultation with Russia regarding the tariff treatment that Russia accords to certain European goods in both the agricultural (palm oil) and manufacturing sectors (paper products and refrigerators). This tariff treatment adversely affects European exports of these goods to Russia.
In this new WTO dispute (DS 485), the EU criticises Russia for applying customs duties that are above “bound” rates to certain products. On joining the WTO, Russia committed not to exceed these rates. In the EU's complaint, it mentions the Russian duties applied to the EU's exports of paper and cardboard, palm oil and its derivatives, and refrigerators and combined refrigerator-freezers.
“Russia diverges from what was decided at the time it was joining the WTO in two ways: either it applies a higher duty rate, e.g. 15% instead of 5%, or it fixes a minimum amount that needs to be paid even if not justified by the agreed duty rate expressed in a percentage of the product value”, the European Commission states in a press release. In the Commission's view, these higher duties have a negative impact on European exports for the three products concerned - which are worth €600 million per year.
Consultations are the starting point of the formal dispute settlement procedure at the WTO and they can last 60 days. At the end of this period, if a satisfactory solution is not found between the parties, the complainant may request adjudication by a special panel.
Russia is the EU's third biggest trading partner. EU exports to Russia are worth €120 billion per year and are dominated by machinery, transport equipment, chemicals, medicines and agricultural products. However, the unilateral measures recently adopted by Russia have a negative impact on bilateral trade, the Commission recalls.
This new dispute between the EU (as complainant) and Russia is the fourth since Russia joined the WTO in 2012 - and follows on from disputes over the recycling tax on vehicles (DS 462), measures targeting pork imports (DS 479), and taxes on light vehicles (DS 479). (EH)