INTERVIEW: Moscow may sue EU for cold rolled steel duties in WTO

MOSCOW, Mar 15 (PRIME) -- Moscow may file a suit to the World Trade Organization (WTO) against an E.U. decision to impose anti-dumping duties on cold rolled steel imports from Russia, as the E.U. has violated WTO rules several times during its anti-dumping investigation, permanent representative to the WTO Gennady Ovechko said in an interview to PRIME released Tuesday.

In February, the European Commission introduced a 19.8–26.2% duty on imports of Russian cold rolled steel following a 6-month investigation. Magnitogorsk Iron and Steel Works (MMK) had a 19.8% dumping margin, steelmaker Severstal 25.4%, and Novolipetsk Steel (NLMK) and other Russian steel producers 26.2%.

Ovechko said that a principal decision to file a suit to the WTO has not been made yet and work to solve the issue is still going on. But the E.U. conducted its investigation with violations of WTO regulations. “So, this measure may be challenged in a court,” he said.

“For instance, the E.U. has to request necessary information for its investigation, and our companies usually cooperate very actively with these authorities. But the information is now always taken into account,” he said.

Methodology for calculating the cost of power, gas, workforce, expenditures, and transportation in the E.U. is different from Russian. “And we argue with this methodology in the first place as decisions like these cost serious market shares and export amounts for our business,” he said.

But the situation may still be solved outside a WTO trial, and people in Geneva, Moscow, Brussels, and the city of Lipetsk are working on different options, he added.

He also said that the E.U.’s suit against Russia’s car utilization fee has been stalled.

“The conditions are now made equal, so the situation around the dispute has also calmed down. Previously, we studied the discriminatory nature of the measure…but now the measure is imposed on all producers, including domestic ones. So, the dispute’s matter is being adjusted and they both (E.U. and Japan) understand that,” he said, adding that Japan has not recalled its suit against the same measure.

Russia plans to transfer its suit against Ukraine’s ammonia nitrate import duties to the trade cartel until the end of April, if talks with Kiev were fruitless. “Speaking of ammonia nitrate, there are energy adjustments in the dumping’s basis, and Ukraine speaks of that. But the country does is not responsible for the methodology that it tried to copy or copied from the E.U. So we heard nothing new during the talks…Now we are going to pass the case to the WTO,” he said.

Russia has imposed restrictions on imports of Ukrainian railcars over their low quality and Kiev has filed a suit against the move, but there is a chance to solve the problem without a WTO arbiter panel, he said.

“Ukraine has presented no arguments over wheel bogies. References to Europe (presented as arguments) mean nothing. They may very well refer to Asia, Africa or Mars. We are acting here in the framework of our national legislation, which fully corresponds with not only WTO regulations, but with the most important task of protection of Russian consumers,” he said.

He also added that Kiev is unable to file a claim to the WTO against Russia’s decision to end duty free trade with the country. “The WTO does not engage in preferential trade agreements, it only monitors the situation. If we see that prolongation of a preferential trade regime with a country is unreasonable, the WTO has to acknowledge the fact,” he said.

“If we want to switch to a WTO-coordinated tariff of the most favored nation regime with Ukraine – we are able to do that any moment, this is our only obligation to the WTO. So no problems may arise here.”

Turkey has complained about Moscow’s economic sanctions imposed from January 1 as part of retaliatory measures after it downed Russian Su-24 bomber jet in November 2015, he said.

“The thing here is that the measures…were compiled by Russia very properly. The General Agreement on Tariffs and Trade has article 21, it has point B that says ‘necessary for protection of its essential security interests’. When we imposed our measures on Turkey, we definitely wrote that this retaliatory measure was made on grounds of national security,” he said.

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