The European Union has launched its first formal trade dispute with Russia at the World Trade Organization.
The EU alleges that Russia, which entered the trading group in August 2012, has been illegally protecting its carmakers with a recycling fee levied on imported cars. The European Commission said the fee has a “severe impact” on EU vehicle exports to Russia, representing a loss of €10 billion (about US$12.8 billion).
“The European Commission has pursued every diplomatic channel for almost one year now to find a solution with our Russian partners on this matter, but to no avail,” said Karel De Gucht, EU trade commissioner, in a written statement. “The fee is incompatible with the WTO's most basic rule prohibiting discrimination against and among imports.”
Russia introduced the fee on Sept. 1, 2012. The fee is levied on cars, trucks, buses and other motor vehicles. While the fee is imposed on all imports from the EU, vehicles produced in Russia are exempted. An exemption is also available for vehicles imported from Kazakhstan and Belarus.
If no solution can be found within 60 days, the EU may ask the WTO to set up a panel to rule on the legality of Russia’s measures.