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EU: "Moscow penalizes European exports"

The European Union criticizes Russia for adopting a heavy "undue" tax on the import of motor vehicles of all sorts the day after Moscow's entry into the World Trade Organization - a tax which, according to the Commission EU violates WTO rules.

EU: "Moscow penalizes European exports"

“We don't have to pay this tax!” says the European Union to Russia. Which for almost a year, ignoring the increasingly pressing calls from Brussels to desist, continues to "unduly" apply customs tariffs, moreover disproportionate, on all sorts of motor vehicles imported from a member state of the EU. To cover, according to Moscow's thesis, the costs associated with the recycling of vehicles when they are no longer able to move. A "discriminatory" practice because vehicles produced in Russia, Kazakhstan and Belarus are exempt, and which therefore, according to the European Commission, violates the rules of the World Trade Organization (WTO) and in ten months "cost" to European companies that produce vehicles well over one billion euros.

Russia, the Commission now recalls in its reconstruction of history, imposed this tax on 156 September last year, i.e. exactly ten days after its entry into the WTO as the 18th member state, at the end of a complex and tiring XNUMX years. An event defined on the day by Karel de Gucht, European Commissioner for Trade, “a great step forward for the further integration of Russia into the world economy; a step that will facilitate trade and investment, stimulate the modernization of the Russian economy and offer enormous opportunities to Russian and European companies”.

"I believe that Russia - concluded the commissioner using words from which some doubts already appeared - will abide by the commitment undertaken to satisfy the rules and regulations of international trade". Russia, underlined a communiqué from the Commission at the time, will have to submit to compliance with certain constraints associated with WTO membership. Such as, among other things, "considerably reducing import duties, limiting export subsidies, allowing EU service providers easier access to the market, streamlining rules and procedures". And also "it will have to comply with specific customs procedures as well as introduce health measures, technical standards, and guarantee the protection of intellectual property".

Despite the usual euphoria at the time, the Commission did not fail to point out some perplexities. Some laws just promulgated in Russia and others still only proposed "seem to be in contrast with the commitments undertaken by that country", the Brussels Executive signaled at the time. Which also expressed "concern" about the proposal of new rules intended, according to the Russian explanation, to "cover the costs of recycling motor vehicles that are no longer able to move", and hoped that those rules would not be approved.

Said, from the European side, and done, from the Russian side. That proposal already ten days later was law. Since then, the recycling fee has placed particularly heavy economic burdens on European exporting companies. To get an idea, just bear in mind that for a new car it can go from a minimum of 420 to a maximum of 2.700 euros, for a car more than three years old from 2.600 to 17.200 euros, and that for other vehicles motor vehicles (trucks, buses, tractors and earth-moving machines) can even reach a ceiling of 147.700 euros.

A few other figures may be useful to underline the extent of the overall exchanges between the two subjects in question. The European Union is Russia's first trading partner, which for its part is the third for the EU. In 2012 this exported goods to Russia for 123 billion euros and imported from that country for 213 billion; the positive balance for Russia was 90 billion.

80% of Russian exports to the European Union concerned raw materials (four fifths oil, the rest gas). The main products that the EU has exported to Russia are cars (for 7 billion euros) and related spare parts (3,5 billion), medicines (6 billion), telephones and their accessories (2,5 billion) and tractors (one billion). 

The total value of motor vehicle exports, which are the object of the dispute, amounts to 10 billion in one year. The total taxes paid by European exporters for these vehicles, according to Russian estimates, amount to one billion three hundred million euros. In some cases, they tell the Commission, the tariff applied exceeds that which was paid before Moscow joined the WTO.

In the ten months since Russia's entry into the WTO and the immediate introduction of the new tax, "incompatible with the fundamental rule of the World Trade Organization which prohibits all forms of discrimination", the European Commission "has undertaken all diplomatic ways to settle the matter with the Russian partner, but in vain". Now he has formally asked Moscow to start a two-way negotiation to resolve the issue. In the event that no response is received within sixty days, the Commission will open a real dispute bringing the dispute to the attention of the WTO, which will have to form a jury of experts which will be entrusted with the task of ascertaining the validity or otherwise of the position of the EU.

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