The EU announced, on Tuesday 15 March, that it wants to withdraw Russia’s ‘most-favoured-nation’ (‘MFN’) status under World Trade Organization (WTO) rules, which means that every member must be treated equally.
It agreed on this measure with 13 other WTO members: Albania, Australia, Canada, Iceland, Japan, North Macedonia, Moldova, Montenegro, New Zealand, Norway, South Korea, the United Kingdom and the United States.
These countries circulated a note to WTO members on 15 March stating that “we will take any actions, as WTO Members, that we each consider necessary to protect our essential security interests”. It added: “These may include actions in support of Ukraine, or actions to suspend concessions or other obligations with respect to the Russian Federation, such as the suspension of most-favoured-nation treatment to products and services of the Russian Federation”. WTO rules provide that MFN status can be withdrawn if essential national security interests are at stake.
However, this measure does not require any WTO procedure, as it is unilateral. It will eventually be up to Russia to decide whether to sue the members in question, if it considers that WTO rules have been violated.
For EU Trade Commissioner Valdis Dombrovskis, “this unprecedented decision sends a political signal of the highest magnitude”.
Future measures
Withdrawal of status allows the EU to impose additional trade sanctions such as tariff increases, or other types of trade restrictions. Each WTO member that has chosen to withdraw Russia’s MFN status is free to impose whatever trade measures it wishes. According to an EU source, it is not so much a question of the EU increasing tariffs, but rather of restricting trade in targeted sectors.
The EU has just imposed an import ban on Russian finished steel products and an export ban on certain luxury goods (see other news).
Suspension of Belarus’ application
The signatories of the letter sent to the WTO also call for the suspension of the assessment of Belarus’ application to join the organisation. Above all, it means that the signatories will not take part in the work on this issue. They cannot really block the procedure unilaterally.
In addition, the EU has also notified the WTO that it is suspending its dispute with Russia, which was initiated in 2021 and in which it is a claimant (see EUROPE 12766/10, 12857/22). The reason is that “the EU cannot continue business as usual”, according to an EU source. (Original version in French by Léa Marchal)