EU asks WTO to settle row with Russia on vehicle imports

BRUSSELS (AFP) - The European Union on Thursday asked the World Trade Organization to set up a settlement panel to rule on a disputed "recycling fee" Russia imposes on imported vehicles.

The request is the latest step in the row under WTO procedures after the 28-nation bloc launched formal consultations with Russia in July, the first such challenge to Moscow since it joined the world trade body last year.

"We've used all the possible avenues to find with Russia a mutually acceptable solution", said EU Trade Commissioner Karel De Gucht.

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.

Levied on cars, trucks, buses and other motor vehicles, it 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.

Brussels says the levy is impacting on EU vehicle exports to Russia, worth 10 billion euros (S$16.9 billion) a year.

"As the fee continues to severely hamper exports of a sector that is key for Europe's economy, we are left with no choice but to ask for a WTO ruling to ensure Russia complies with its international obligations," Mr De Gucht added.

Mr 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 per cent) including vehicles - and imported 213 billion euros worth, mainly raw materials (80 per cent).

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.