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Russia: Kremlin To Hit Europe With Carpet Quotas

Moscow, 23 September 1997 (RFE/RL) - Russia's government will decide soon whether to impose a quota that will cut carpet imports from the European Union (EU) by more than one half, according to a top trade official.

It is the first concrete step towards retaliation for the rising tide of European protectionism against Russian exports.

At a meeting of the inter-ministerial committee on safeguard measures early this month, government officials decided to recommend imposition of the carpet quota, because of the impact imports have had on Russia's domestic manufacturers; and also because of the failure to date, of the European Commission to come to terms with Russia on the textile trade.

The commission is chaired by Deputy Prime Minister (and Minister of Economy), Yakov Urinson.

Georgy Gabounia, First Deputy Minister of Foreign Economic Relations, who is also a member of the trade measures committee, said Friday that the committee has recommended a quota that, if approved by the full government, would reduce the current annual level of carpet imports, mostly manufactured in Belgium, from $300 million to around $100 million.

The action against carpets has been under consideration for months, as talks on lowering the EU quotas on Russian textile exports have dragged on without result. Gabounia said there may be one last round of negotiations this month before the government decides on the new quota.

Although some Russian ministers are reluctant to be seen to raising trade barriers, they acknowledge that massive cuts in production, idle plants, and mounting unemployment in Russia's already severely depressed textile-producing regions substantiate the case that domestic injury justifies introduction of quotas.

"It is ridiculous," Gabounia said, "that the EU imposes quotas on our textile products, while we impose no limits on imports of their textiles."

Russian trade figures are approximate only. They indicate that last year, Russia -- under a quota regime agreed with the EU -- sold textiles totalling $150 million to EM-member states. By contrast, the EU shipped textiles, including machine-manufactured carpets, which Russia values at about $540 million.

"We are in favor of a liberal trade regime, with no quotas. The fact that we have suggested to the EU that it removes quotas is already a concession on our part," Gabounia said.

"The normal international trade rules provide that net importing countries apply quotas, not exporters," Gabounia said. "The EU is an exporter to Russia. It ships more than three times the value of textiles to us than we ship to the EU. So it should be Russia that is entitled to apply the quotas."

(John Helmer is a Moscow-based journalist, who focuses mainly on economic issues, and frequently contributes to RFE/RL.)