* Trade row over cars risks escalating into WTO dispute
* EU Commissioners, Russian ministers to meet next week
By Robin Emmott
BRUSSELS, March 14 The European Union told
Russia on Thursday to drop restrictions on its exports or face a
legal dispute at the World Trade Organisation ahead of meetings
in Moscow next week aimed at dealing with a series of conflicts.
Struggling to narrow differences with Russia on issues
ranging from Syria to energy, the European Commission said a fee
on imported cars flouted WTO rules that Moscow promised to
adhere to when it joined the global trade body last August.
"These measures, which are in breach of WTO commitments,
should be terminated rapidly," the Commission said in a report
that monitors trade protectionism around the world. "If no
results can be achieved, the EU will consider launching a WTO
dispute settlement proceeding," it said.
The EU is upset about Russia's requirement since September
that foreign cars must pay a recycling fee to be able to drive
on Russian roads. That puts up their price in car showrooms and
makes them less attractive at a time when European carmakers,
struggling at home, want to reach Russia's growing middle class.
Brussels also says new Russian regulations on alcoholic
drinks and textiles will make it difficult for European
exporters to sell to Russia, while Moscow banned the import of
live animals from the EU in March last year.
EU leaders will discuss ties with Russia in Brussels on
Friday, and EU Commissioners including EU Trade Chief Karel De
Gucht will go to Moscow for a meeting with Russian officials
next Thursday and Friday to discuss areas from trade to Syria,
human rights and energy.
Russia and the EU are deeply intertwined, with Europe
relying heavily on Russian energy exports and Russians hungry
for EU products and access to its 500 million consumers.
"IT DEPENDS ON RUSSIA"
French President Francois Hollande tried to put trade ties
on a new footing in his visit to Moscow last month while
demanding a firm defence of human rights and pushing to win
support for Western efforts to end the fighting in Syria.
But the atmosphere was little better than that at the
EU-Russia summit in Brussels in December, which bristled with
tensions. Russian President Vladimir Putin told European
Commission President Jose Manuel Barroso he was "emotional" and
"wrong" about Europe's energy policy.
Russia is infuriated by EU efforts to liberalise its energy
market and force state-dominated Gazprom to sell infrastructure
to prevent it controlling distribution networks.
Europe relies on Russia, which sits on the world's biggest
gas reserves, for around a quarter of its natural gas needs.
A long list of other grievances includes EU criticism of
Moscow's attitude towards civil liberties.
When it comes to trade, Brussels says a wide range of
European goods sold to Russia -- the EU's fourth-largest export
market -- are discriminated against, and that Moscow levies
tariffs that are higher than WTO rules allow.
Russia joined the WTO in August last year after two decades
of waiting, but the European Commission said Moscow has adopted
a series of protectionist measures since joining and is
violating WTO rules by closing its markets to competitors.
"We have made it clear and plain that for us the recycling
fee (levied on imports of European cars) in its current form is
unacceptable," trade chief De Gucht told Reuters in a recent
interview. "Avoiding a WTO dispute depends on Russia."
(Additional reporting by Barbara Lewis; editing by Patrick