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Russia is involved in first trade argument over its WTO membership

October 11, 2013, 10:28 UTC+3

The reason of the argument is the utilization duty payable for imported vehicles

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MOSCOW, October 11 (Itar-Tass World Service). — Russia has become a party in the first trade argument in the framework of the World Trade Organization. The reason of the argument is the utilization duty payable for imported vehicles, which, foreign car producers claim, compensates for lower duties following the accession to WTO.

Since beginning of the current year, Russia has been promising the EU to offer the utilization duty to the national car manufacturers and has launched the procedure already. However, the EU claims are even bigger - they refer also to high duty rates.

On Thursday, the EU demanded officially from WTO to organize a special group of experts-arbitrators, which should analyze how the Russian utilization duty on imported vehicles complies with the organization’s norms, the Kommersant writes.

Russia has begun the process of unifying the positions of importers and national producers: on October 8 the State Duma adopted in the first reading a bill, under which Russian car producers will also be liable for the duty. The State Duma’s First Deputy Chairman of the Industry Committee Vladimir Gutenev told the Kommersant that the second and third readings might be due “within two weeks.”

However, the European Commission’s Press Officer John Clancy implementation of the new rules would not close automatically the claim. Head of the Trade Negotiations Department at Russia’s Ministry of Economy Maxim Medvedkov told the Kommersant that the EU was interested not only in equal conditions of the duty. It wants to make sure the duty is payable not only by Russian producers, but also by importers from the Customs Union. The EU insists also duties on new and used vehicles should not differ a lot. Besides, the EU is sure duties on trucks should not be much higher than those payable for cars.

Moscow, in its turn, has been preparing measures to press the EU, the daily writes. A week earlier, Vladimir Putin said he had ordered the government “to initiate in the framework of the WTO a procedure to protect interests of Russian producers in foreign markets.” Maxim Medvedkov said Russia, for example, could argue at WTO the EU anti-dumping duties on imported Russian products, where the price contains a high share of energy costs. He meant, among others, duties on metallurgical products and on fertilizers.

Professor at the Higher School of Economics, a leading expert of the Russian Academy of Sciences’ World Economy Institute Alexei Portansky said “it is not worth looking for politics in this argument.” “Clearly, we have breached WTO’s basic rules and recognized it de-facto, besides, the EU claims annual billions’ losses from the duty.”

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