UPDATE 1-EU chides Russia for rise in protectionism

Mon Nov 26, 2012 11:43am EST

By Tom Miles

GENEVA Nov 26 (Reuters) - Russia has recently taken "a surge of protectionist measures", some of which break global trade rules, the European Union said on Monday, citing in particular a ban on imports of live animals from the EU and a recycling fee on imported vehicles.

"The EU is in active consultations with Russia to solve these issues," an EU diplomat told a meeting of the World Trade Organization's Goods Council, according to a transcript provided to Reuters.

However, Russia had refused to make progress on a ban on the import of pigs for slaughter from the EU it put in place on March 20, which the EU said was disproportionate and had a doubtful justification.

A recycling fee, ranging from 420 euros ($540) for imported small cars to 150,000 euros for heavy construction vehicles, also seemed to break WTO rules because it discriminated against importers, the EU official said.

Ukraine, which is part of a customs union with Russia, is planning to adopt a similar recycling fee, and should reconsider the move because it is incompatible with the rules, the EU said.

QUESTIONS RAISED

The EU's criticism of the recycling fee was backed by Japan and the United States, while Norway expressed concern over Russia's system of permits subject to veterinary control, according to an official who was present at the meeting.

"There are also a number of other areas where the EU has questions or doubts about the faithful implementation of Russia's obligations under the WTO," the EU diplomat said.

Russia joined the WTO in August after a marathon 19-year wait. It still has not appointed an ambassador and many trade diplomats are divided over whether it will take some years to get fully up to speed, as China did, or swiftly become embroiled in trade disputes with its biggest trading partner, the EU.

A Russian government source told Reuters in September Moscow was likely to challenge the EU at the WTO over restrictions on Gazprom's control of its European gas pipeline assets.

Meanwhile, Russia's trade relations with the United States remain outside the WTO rules, since the United States has not yet passed a law needed to normalise trade relations with Russia.

Russia's accession to the WTO was bogged down for years, with targets and deadlines repeatedly put back until the stalemate gave way to a sudden breakthrough in mid-2011.

The deal to let Russia join has been widely questioned, both by foreigners who suspect Russia was pandered to with lenient membership terms and by Russians who think global trade standards will be tough medicine for Russia's creaking economy.

Among those warning gains from membership will follow an early bout of pain is President Vladimir Putin, who said last week that the initial period would require "a serious adjustment of the economy".