By on July 9, 2013

Putin - Picture courtesy cbc.ca

Less than a year after joining the WTO, Russia finds itself dragged in front of the same. The EU launched a formal trade dispute with Russia, claiming that its Eastern neighbor is “illegally protecting its carmakers with a recycling fee levied on imported cars,” as Reuters reports.

“The European Commission has pursued every diplomatic channel for almost one year now to find a solution with our Russian partners on this matter but to no avail. The fee is incompatible with the WTO’s most basic rule prohibiting discrimination against and among imports,” EU Trade Commissioner Karel De Gucht told the wire.

Car importers have to pay a “recycling fee” of around 5 percent of a car’s sticker price, local makers do not.

Russia was only admitted to the WTO after Moscow signed up to a series of tariff cuts, lowering import duties on cars from 30 percent to 25 percent.” Slapping on the bogus “recycling fee” is simp0le seen as the old tariff with a green sheen.

Under WTO rules, Russia has 60 days to satisfy EU concerns about the recycling levy, by changing or explaining its policy. After that the EU could ask the WTO to adjudicate, which could force Moscow to change the rules or face trade sanctions.

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