EU links Russian WTO membership with wood tariff issue

Trade Commissioner says tariffs violate EU-Russian protocol

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The massive export tariffs that Russia plans to impose on raw timber have become a major stumbling block in negotiations between the European Union and Russia on Russia's possible membership in the World Trade Organisation.
      The European Commissioner for Trade Peter Mandelson raised the wood tariffs at a meeting with Russian Minister of Economic Development, German Gref at the St. Petersburg Economic Forum on Sunday.
     
Mandelson told Reuters News Agency on Sunday that the tariffs are causing great concern, because they are seen to violate a protocol signed by Russia and the EU on the WTO question. The paper, signed three years ago, states that Russia would not impose export tariffs on wood.
      Minister Gref said that he did not want to take a stand on "legal nuances", but he admitted that the tariffs are among the most difficult questions in the talks.
      "We are actively looking for solutions with our Finnish and Swedish partners, which would satisfy everyone", Gref said, answering a question put to him by Helsingin Sanomat.
      Russia is raising export duties of wood by degrees up to EUR 50 per cubic metre by 2009. The move could lead to the closure of paper factories in Finland.
      According to Finnish Foreign Trade Minister Paavo Väyrynen, the wood tariff issue should be resolved in negotiations between Russia and the WTO in the coming weeks.
     
The WTO was a focal point of the forum, which concluded on Sunday, bringing together 6,000 key political and economic figures from different countries.
      Russian President Vladimir Putin criticised the WTO and other economic organisations, calling them "archaic and undemocratic".
      Putin proposed that their influence could be balanced by establishing regional trade organisations in the Eurasian region.
      "Regional unions create a new structure for the global market. The freeing of trade mainly takes place within the framework of these kinds of systems."
     
During the forum, Foreign Trade Minister Väyrynen visited technology village projects in St. Petersburg. The city is getting two Finnish-run innovation parks, run by the Technopolis company, and export promotion organisation Finpro.
      Väyrynen also met with St. Petersburg's Deputy Governor Mikhail Oseyevski, who suggested the possibility that a settlement might be found in the dispute over land rights over a Finnish-run container terminal in the Port of Kronstadt.
      The Russian real estate authority Rosstroi has been trying to take over land leased by Moby Dick, a subsidiary of the Finnish company Container Finance.
      However, St. Petersburg Governor Valentina Matviyenko says that the issue is not a topical one. "We are disappointed with the behaviour of Moby Dick. A dam is being built in the area, and the property issue will not be resolved until 2010", she said in an answer to a question put to her by Helsingin Sanomat.


Previously in HS International Edition:
  Scuffles over control of Finnish-owned container terminal near St. Petersburg - issue to go before court (18.5.2007)
  President Halonen says all possible steps taken over timber tariff issue (4.6.2007)
  Timber tariffs decrease investors´ interest in Russian forest industry (31.5.2007)
  Russian wood tariffs could threaten economic viability of Saimaa Canal (29.5.2007)
  Väyrynen demands discussion of wood tariff dispute at EU-Russia Summit (18.5.2007)
  St. Petersburg calls off extension of Finnish cargo port (2.5.2007)
  Finnish company accuses Russian officials of hostile takeover attempt (13.10.2006)

Helsingin Sanomat