WTO called in to settle EU-Russia trade disputes

22nd July 2014, Comments 0 comments

The World Trade Organization was Tuesday called in to settle two disputes over Moscow's ban on EU pork and Brussels' trade penalties against Russian steel and fertiliser firms.

Trade sources said the WTO's disputes settlement body created panels to hear the complaints, which come at a time of heightened tension between Russia and the EU over Ukraine.

Moscow imposed a pork embargo in January, shortly before the crisis broke out in Kiev and sent Kremlin ties with the EU to their lowest ebb in decades.

Russia argued that the ban was essential due to cases of deadly African Swine Fever in several member states of the 28-nation European Union, including former communist Poland and Lithuania.

While members of the 160-economy WTO are allowed to restrict trade on health grounds, Brussels maintains that the Russian ban is totally misplaced.

Critics repeatedly have accused Russia of using import bans as political tools both before and since it joined the WTO in 2012.

Earlier this month Moscow banned certain meat exports from Moldova after it signed an association deal with the EU, swiftly followed by restrictions on dairy products from Ukraine.

Critics say Moscow is using the pork ban as political punishment against countries in its Cold War stamping ground that are now among its staunchest critics.

Poland and Lithuania have faced meat and dairy product bans in the past.

Brussels argues only a handful of swine fever cases have been found in those countries while imports from Belarus, a Moscow ally where the outbreak is believed to have begun, are still allowed.

Russia has long been a major market for EU pork, buying an annual 1.4 billion euros' worth ($1.9 billion), or a quarter of the bloc's exports.

Brussels says its sector is losing four million euros a day because of the ban.

Brussels has already asked the WTO to rule on Russia's "recycling fee" imposed on cars, trucks, buses and other vehicles, which it says it protectionist as it only applies to imports.

The second panel set up on Tuesday will decide whether Brussels is violating WTO rules by keeping "energy adjustment" tariffs, in force since 2002, on Russian steel and fertiliser makers.

WTO can impose extra duties when goods are "dumped" on them -- sold at below market prices to grab business.

But they must prove that their domestic producers are suffering from dumping, and that they are not simply deploying duties to hit foreign competitors.

Russia argues that the anti-dumping tariffs have been applied unfairly, making it impossible for Russian companies to export to EU markets, losing them hundreds of millions of dollars a year.

Russia has also hit the EU with a complaint over energy market reforms, which it says hurt its gas giant Gazprom.

WTO panels, made up of independent trade and legal experts, can authorise retaliatory measures if they rule in favour of a plaintiff.

The WTO's disputes settlement process can last for years, amid appeals, counter-appeals and compliance assessments.

© 2014 AFP

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