EU takes Russia vehicle dispute to WTO

The European Union on Tuesday filed a dispute with Russia over vehicle imports at the World Trade Organization, the first such challenge to Moscow since it joined the trade body almost a year ago. The EU said it had repeatedly raised the issue of a recycling fee imposed by Russia on imported vehicles in September, but to no avail. "It is severely hampering trade in a sector which is key for the European economy," said the bloc's Trade Commissioner Karel de Gucht. "We expect Russia to engage in WTO consultations with us to find a solution to this problem quickly." "The European Commission has pursued every diplomatic channel for almost one year now to find a solution with our Russian partners on this matter," he added. The EU says the fee, introduced days after Russia joined the WTO, is discriminatory because domestic vehicles are exempted as are those imported from Kazakhstan and Belarus which are in a customs union with Moscow. "Europe understands that there is an environmental need to encourage car recycling. However, we have very grave concerns about the fact that the Russian legislation on car recycling fees discriminates imported vehicles," De Gucht's spokesman John Clancy said last month. At its Geneva headquarters, the WTO said "this is the first dispute involving the Russian Federation since it acceded to the WTO on August 22, 2012."The EU's Tuesday "request for consultations" is the first step in the WTO's dispute settlement process, giving the two sides the opportunity to discuss the matter and reach a friendly solution within 60 days. If not, the EU can request to take the matter further for a ruling. The EU says the recycling fee, levied on cars, trucks, buses and other motor vehicles, ranges from about 420 to 2,700 euros for a "new" vehicle and from 2,600 to 17,200 euros for a vehicle older than three years. For specialist vehicles such as mining trucks the fee can be extremely hefty. De Gucht in December had listed the recycling fee as a key concern in trade with Russia, along with a ban on the import of live animals, a measure he said was designed to protect Russian producers. He said at the time that the EU "would prefer to negotiate our way to a solution." "However, if that does not prove possible the EU is most certainly prepared to use all the legal avenues at our disposal. And since Russia's accession, that includes dispute settlement at the WTO," he had said. Russia is the EU's third-largest trading partner and the EU is Russia's biggest partner. In 2012, the EU exported 123 billion euros of goods to Russia -- mostly machinery and transport equipment (50 percent) including vehicles -- and imported 213 billion euros worth, mainly raw materials (80 percent). The Russian parliament in May modified the recycling fee to extend it to locally-made vehicles but the draft legislation has not gone before parliament.