EU hits Russia with first WTO dispute

GENEVA/BRUSSELS - Reuters

The European Union launched the first formal trade dispute with Russia at the World Trade Organization on Tuesday, less than a year after Moscow joined the trading club.

The EU has told the WTO it held that Russia was illegally protecting its carmakers with a recycling fee levied on imported cars, and had given up waiting for Moscow to change the law.

“The European Commission has pursued every diplomatic channel for almost one year now to find a solution with our Russian partners on this matter but to no avail. The fee is incompatible with the WTO’s most basic rule prohibiting discrimination against and among imports,” EU Trade Commissioner Karel De Gucht said in a statement.

The dispute follows repeated warnings from Brussels about what it sees as Russia’s non-compliance and loud dissent within Moscow about the merits of being in the WTO at all.

Joining the WTO is a compact, with the cost of signing up to tough standards offset by the benefits of gaining access to a globally regulated market with guarantees against protectionism. But Russia’s critics say it has never made good on its obligations, and the car levy, introduced nine days after Russia became a member, is one of a slew of non-compliant policies on goods ranging from alcoholic drinks to combine harvesters. Importing a car to Russia involves paying a fee to cover the future cost of recycling it.
Russian-produced cars, however, are not subject to the same charge, making it, in the EU’s eyes, in effect an import tax.