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Russia: Nemtsov Gives The Cold Shoulder To EU Official

  • Stephanie Baker

Moscow, 18 June 1997 (RFE/RL) -- Russia's First Deputy Prime Minister Boris Nemtsov yesterday snubbed the European Union's top trade official, refusing to meet with him on the grounds that the EU is discriminating against Russian imports.

Nemtsov's spokesman Andrei Pershin told Interfax that Nemtsov decided to skip a scheduled meeting in Moscow with the European Commission's Vice-President Sir Leon Brittan because of the Commission's recent decision to impose temporary anti-dumping duties on the import of Russian iron and steel pipes. Pershin added that Nemtsov views the EU's anti-dumping regulations towards Russia as unacceptable, saying they put Russia on the same level as Cuba and North Korea.

Nemtsov's rebuff came as Brittan wrapped up two days of talks in Moscow aimed at encouraging Russia's four-year old bid to join the World Trade Organization.

Brittan, on his first visit to Russia in more than two years, said at a press conference that "It is a shame that Nemtsov has not taken the opportunity to put his concerns to me in an honest, manful way, face to face."

The diplomatic jostling over trade comes amid a growing chorus of complaints from countries around the world that Russia is dumping goods at below world market prices. The Russian Trade Ministry has estimated that the economy looses $1 billion annually because of anti-dumping duties imposed on Russian goods.

Russian exports play an important role in the country's fledgling market economy and are viewed as a key component to the government's plans to spur economic growth.

The EU, which is Russia's largest trading partner, accounts for about 40 percent of Russia's foreign trade. But bilateral trade relations have been dogged by more than a dozen EU anti-dumping cases against Russian goods and tough negotiations over the import of Russian textiles and steel into the EU.

In its most recent case, the EU last month imposed provisional anti-dumping duties of 33 percent on Russian steel and iron pipes, which are used in the oil and gas industry. Brittan said the duties were in place for only six months and could be reduced or eliminated if the Russian side can prove that the charges are unjust.

In refusing to meet with Brittan, Nemtsov cited the EU's policy of considering Russia a non-market economy in anti-dumping cases, a designation which discounts Russian data and allows dumping complaints to be based on production cost figures from other countries. Russian officials say the designation is unfair and maintain that most dumping complaints would be dismissed if Russia were considered a market economy.

Brittan, however, strongly denied charges that the EU was discriminating against Russia and said that only about 1 percent of Russian exports to the EU were affected by anti-dumping duties. He said suggestions that the EU's use of the phrase non-market economy was in no way discriminatory and that suggestions to the contrary were, in his words, "politically-motivated."

Nemtsov's rebuke of Brittan, who was once a leading candidate to take over the presidency of the EU, surprised many. Some commentators noted that Nemtsov's public snub of Brittan might be a political move designed for domestic consumption to show that the reformist cabinet is not bowing to Western interests. For example, Chris Granville, head of research at United City Bank, said Nemtsov's demarche was far more effective politically than sitting down to talks, which, he said, were unlikely to resolve the highly technical dumping case that is based on strict procedural rules.

Brittan met late yesterday with First Deputy Prime Minister Anatoly Chubais, who has spearheaded Russia's drive to join international financial institutions such as the WTO.

Brittan said Russian membership in the WTO would build on the government's progress in gaining a greater voice on the international economic stage, pointing to President Boris Yeltsin's participation in the G7 summit of the world's leading industrialized nations in Denver later this week.

At a summit with Yeltsin earlier this year, U.S. President Bill Clinton expressed support for Russia's entry to the WTO by 1998, a date which many believe is unrealistic. The setting of a deadline has provoked criticism that the West is supporting Russia's bid to enter WTO as compensation for NATO's planned eastward expansion, which Moscow strongly opposes.

Brittan, however, dismissed talk of deadlines. He said the EU does not regard WTO membership as, in his words, "a political prize to be awarded nor as a technical trade related series of deals." Instead, he said membership would boost the Russian economy and underpin reforms.

Brittan said Russia stands to benefit from WTO membership through improved access to world markets and a dispute settlement mechanism which would allow Moscow to defend its presence in international trade But he said Russia would need to take steps to reduce import tariffs, open up the service sector to foreign competition and beef up enforcement of intellectual property rights laws in order to join the trade club.

Brittan said that the EU would begin considering Russia a market economy as soon as it joins the WTO. But the distant offer does little to address Russia's immediate concerns that its goods are being shut out of the EU market.