MOSCOW, July 9 (RIA Novosti) – The World Trade Organization may start hearing in September the first dispute between Russia and the European Union since Moscow joined the organization, if the two sides fail to settle the issue of Russia's vehicle recycling levy out of court, the Economic Development Ministry reported on Tuesday.
The EU will launch its claim against Russia at the WTO later on Tuesday, challenging Moscow's recycling levy on imported cars, Reuters reported on Tuesday, citing EU diplomatic sources.
"We gave Russia until July 1 to lift these recycling fees and it failed to do so, so that is why we are taking this to the WTO. Hopefully this can be resolved quickly. It is important that Russia, as a WTO member, plays by global trade rules," Reuters quoted an EU diplomat as saying.
The EU has criticized Moscow’s recent introduction of a disposal fee on car imports, arguing that the charge is actually a protectionist move under the guise of an environmental measure, levied to shield domestic car producers from increasing competition since Russia joined the WTO.
“So far we have not received any official documents on the EU initiating a dispute resolution procedure but EU colleagues have indeed informed us in a working procedure that they intend to file these documents to the WTO soon,” said Yekaterina Mayorova, deputy head of the ministry’s department for trade negotiations.
“We expected such developments,” she added.
A car recycling fee is currently paid on imports of new and used cars into Russia, while domestic automakers only have to provide guarantees of safe car disposals in the future. Russia surpassed Germany last year as Europe's largest car market, according to a market study by the Association of European Businesses.
European Commission President Jose Manuel Barroso said after the Russia-EU summit in Yekaterinburg in early June that the EU hoped Russia would introduce an equal recycling charge for imported and domestically-produced cars by July.
Russia’s Economic Development Ministry said in February it would make domestic auto-makers pay the same fee as foreign manufacturers. The Russian government earlier submitted a bill to parliament to oblige Russian automakers to pay the recycling fee.
Mayorova said the State Duma, the lower house of Russia’s parliament, had not managed to pass the bill by this time and had gone on summer vacation.
“That is why, with regard to the EU decision, we’ll act within the WTO’s formal dispute resolution procedure,” she said.
Under WTO rules, Russia has 60 days to settle the EU claims regarding the recycling levy through negotiations. After that, the EU may ask the WTO to pass a ruling which could force Moscow to change the rules or face trade sanctions.
