EU takes Russia-Italy trade row to WTO

AFP - [email protected] • 21 May, 2014 Updated Wed 21 May 2014 18:09 CEST
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The European Union said on Wednesday that it had launched a fresh challenge to Russia at the World Trade Organization, seeking to strike down Moscow's import duties on vans from Italy and Germany.


The EU's diplomatic mission at the Geneva-based World Trade Organization (WTO) said it had filed a formal request for consultations with Russia, the first step towards a full-blown trade dispute.

In Brussels' sights are the anti-dumping duties that Russia has slapped on so-called "light commercial vehicles" (LCVs) made by Italy and Germany, both of which are leading global players in the auto sector.

"The EU believes the anti-dumping duties are incompatible with WTO law, both on procedural and on substantive grounds," the EU mission said in a statement.

Both sides now have 60 days to try to negotiate an end to the dispute, before the EU has the option of asking for a ruling by a WTO disputes panel - a process that can last for years, amid appeals, counter-appeals and compliance assessments. Moscow rejected EU claims of any wrongdoing. 

"We consider that our measure fulfils our WTO obligations completely. We're ready to work closely with a panel to find a solution to this dispute," Maxim Medvedkov, Russia's chief trade negotiator, was quoted as saying by the news agency Ria Novosti.

WTO members are allowed to impose extra duties when goods are being "dumped" on them or sold at below market prices to grab business.

But they must prove that their domestic producers are suffering as a result of dumping, and that they are not simply deploying duties to hobble foreign firms' trade.

The EU argues that "the duties of 23 percent to 29.6 percent imposed on European LCVs are significantly hampering access to the Russian market."

'Choking off' EU exports

In 2012, the year Russia joined the WTO, EU LCV exports to the country were worth more than €100 million, it said.

Exports have been declining since Russia imposed a "recycling fee" on cars, trucks, buses and other vehicles, days after joining the WTO, it added.

The WTO has already been asked to rule on an EU complaint over the recycling fees, which apply only to imported vehicles.

"The anti-dumping measures subject of today's panel request are further choking off EU exports of LCVs," the EU said.

Brussels and Moscow are also wrangling at the WTO over embargoes on a string of goods from ex-communist countries, several of which are now members of the 28-nation EU.

Since joining the WTO, Russia has imposed bans on dairy products, chocolates, wine and meat from countries including Lithuania, Poland, Moldova and Ukraine.

Moscow has cited quality concerns that allow countries to take such a step under WTO rules. Critics say Russia offers little scientific evidence and claim the bans are political, hitting countries that refuse to toe their Soviet-era master's line.

Russia, in turn, has hit the EU with a WTO complaint over Brussels' energy market reforms, which it says hurt its gas giant Gazprom.

The WTO polices global trade accords in an effort to offer its 159 member economies a level playing field, and can authorise penalties against wrongdoers.

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AFP 2014/05/21 18:09

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