Facing wto complains

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    22-Jul-2015
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  • Facing WTO Complaint, Russia Passes Scrappage Fee

    MOSCOWRussia's parliament passed a bill on Tuesday that would require

    domestic car makers to pay the same recycling fee as foreign manufacturers, just

    days after the European Union filed a complaint over the double standard with the

    World Trade Organization ( ).

    The fee took effect a week after Russia joined the WTO last year. The European

    Commission has said it is a thinly disguised import tariff designed to replace the ones

    that Russia abolished to meet WTO membership requirements. EU auto exports to

    Russia are down 7% as a result of the scrappage fee, the EU has said.

    The complaint, the first filed in the WTO against Russia, is a significant test of the

    organization's ability to rein in the most recent major economy to join its ranks.

    The bill, approved by the lower house of parliament, calls for the fee to be applied to

    manufacturers in Russia, Belarus and Kazakhstan beginning in January. The

    legislation now heads to Russia's Federation Council, where it is expected to pass.

    President Vladimir Putin must also agree before it becomes law.

    It wasn't immediately clear how the bill's approval would affect the EU's complaint at

    the WTO.

    "The EU is currently studying the bill and looks forward to further details and

    clarifications in the very near future," EU trade spokesman John Clancy said.

    The EU lodged its first protest with the WTO in July, saying Russia was illegally

    protecting its car makers as the fee didn't apply to cars made at home or to those

    from Belarus or Kazakhstan, both part of a customs union with Russia.

  • The 28-nation bloc sought consultations in a bid to resolve the dispute within 60 days.

    Japan filed a similar trade complaint against Russia in July.

    Last week, saying Russia wasn't budging, the EU went a step further and asked the

    WTO to declare the fee a violation of international trade rules. Moscow countered that

    the EU ignored its proposals during talks.