Russia to lower tariffs on EU's paper, fridges after WTO ruling

ZURICH (Reuters) - Russia has violated its trade commitments by inflating tariffs on supplies of palm oil, paper and refrigerators from the European Union, a World Trade Organization (WTO) said on Friday, in its first ruling on Moscow since Russia joined in 2012.

An European Union flag flutters outside the EU Commission headquarters in Brussels, Belgium, January 12, 2016. REUTERS/Francois Lenoir

The decision of the WTO panel comes after the EU accused Russia of levying higher-than-permitted tariffs on the products in 2014, and Brussels and Moscow failed to settle the disagreement between themselves. []

Russia says that since then it has already downgraded most of the tariffs at the center of the spat and will lower the rest - on paper and refrigerators - in the near future.

"Russia has never denied that due to technical reasons the import tariffs on certain products were differing from those which were set in its tariff liabilities," Russia's Economy Ministry said in a statement on its website on Friday.

The EU contends Russia’s higher duties have had a clearly negative impact on exports of products worth some 600 million euros ($670 million) annually.

Following the ruling, the European Commission said the WTO decision highlights Russia’s failure to live up to its trade commitments.

“Despite being a WTO member since August 2012, Russia has not yet fulfilled some of its commitments made before its accession,” the Commission said in a statement. “This includes one of the WTO’s most fundamental rules, according to which its members must not apply customs duties” exceeding levels to which they pledged.

The Commission did say Russia had taken steps to bring some of the challenged measures into compliance over the course of the panel’s deliberations.

EU officials have said the matter is not linked to the West’s conflict with Russia over its role in the Ukraine crisis.

In its decision, the WTO panel ruled in favor of the EU on 11 of 12 measures at issue, saying Russia’s tariff treatment of the goods was inconsistent with its obligation not to apply tariffs exceeding those it had committed to in its WTO schedule.

Beyond this dispute, EU has also initiated settlement procedures on a number of other trade barriers it maintains have been imposed by Russia, including recycling fees on cars, a pork import ban and anti-dumping duties on light commercial vehicles.

Those matters remain unresolved.

($1 = 0.8933 euros)

Reporting by John Miller in Zurich and Foo Yun Chee in Brussels; additional reporting by Polina Devitt in Moscow; Editing by Michael Shields, Larry King