The European Union has launched a trade dispute at the World Trade Organization to challenge what it feels are Russia’s unjustified tariffs on many imports from the bloc. Brussels said Moscow did not stick to WTO rules.
The EU has filed a complaint contesting Russia’s heavy import duties on paper products, refrigerators, freezers, and palm oil, RT reported Saturday.
“Russia diverges from what was decided at the time it joined the WTO in two ways: either it applies a higher duty rate, e. g. 15 percent instead of 5 percent, 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 EU’s press release says.
The EU said the higher duties have a “clear negative impact” on EU paper, refrigerators, and palm oil that are being taxed.
The European Union requested official consultations with Russia with regard to imposed import duties.
It was the first step in a fresh dispute settlement procedure in response to what Brussels viewed as violations by Moscow of its obligations under the WTO treaty.
“Those higher duties have a clear negative impact on European exports on goods worth 500 million euros [$629 million] a year,” the European Commission said in a statement on its homepage.
Brussels confirmed that Russia would have 60 days to settle the dispute or face a panel ruling on the case.
Relations Fragile
Relations between the EU and Russia have been fragile since the Ukraine crisis started, and trade is being used in the diplomatic quarrel. In August, Russia banned all EU produce in response to Western sanctions which aim at hitting the Russian economy.
Russia is the EU’s third largest trading partner worth $440 billion between the two last year. Geographic proximity makes the two natural trading partners in machinery, transport equipment, chemicals, medicines and agricultural products.
Russia joined the WTO in August 2012 after nearly two decades of back and forth negotiations on the conditions for entry.
New EU Commission
The new European Commission led by EU veteran Jean-Claude Juncker formally took office Saturday, promising to “get down to work” as Europe faces a host of political and economic challenges.
The agenda is heavy, with Juncker making it his first task to launch a 300 billion euro ($380b) investment plan by Christmas to kickstart a faltering economy plagued by stubborn, near-record unemployment.
The Ukraine crisis meanwhile shows no sign of easing, the European Union is locked in difficult talks on a massive and controversial trade deal with Washington and Britain’s future in the bloc is uncertain.
“Now it’s time to roll up the sleeves and get down to work. Europe’s challenges cannot wait,” Juncker said in a statement Saturday.
