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Russia: Primakov And EU Leaders Discuss Trade Protectionism

Brussels, 27 January 1998 (RFE/RL) -- The issue of trade protectionism is expected to top the agenda of a meeting in Brussels today between European Union leaders and Russian Foreign Minister Yevgeny Primakov. The meeting is the first of the so-called Russia-EU Cooperation Council, which was created under a 1994 agreement that took effect last month.

British Foreign Secretary Robin Cook said he also will discuss the EU's planned eastward expansion with Primakov today. Britain currently holds the EU presidency.

Brussels wants Moscow to drop trade policies that hinder EU countries from selling goods in Russia. EU spokesperson Lousewies van der Laan said Brussels hopes for what she called "positive gestures" from Primakov. She said the opening of Russian markets to more trade from abroad will help Moscow accelerate its bid to join the World Trade Organization.

In particular, the EU wants Russia to lift restrictions on European eggs, alcohol and carpets. Some EU countries have complained about certification-and-testing requirement on EU goods, as well as what they say are discriminatory fees and arbitrarily enforced customs fees for EU traders.

For example, reports say merchants distributing European alcohol in Russia sometimes must pay 30 times more for a license than those who sell only Russian-made alcohol. Russia also has imposed quotas on EU carpets.

For its part, Brussels appears ready to make some concessions that would make it easier for Russian firms to sell their products in the EU. The European Commission has offered to change the criteria by which it judges whether Russian producers are "dumping" goods in Europe. Dumping is a process where traders sell goods at prices below the production cost in order to drive competitors out of business.

Of the EU's 146 anti-dumping duties, there are 14 which now target Russia. Those duties affect about 200 million dollars worth of Russian trade.

The European Commission last month recommended that Russia no-longer be classified as a "non-market economy." But the proposal still needs the approval of the 15 EU trade ministers, who are scheduled to meet next month.

In the meantime, Russia's "non-market" classification allows western Europeans, rather than Russians, to judge how much it costs to produce Russian goods. Consequently, it has means Europeans have determined whether Russian firms are dumping goods in the EU -- and whether anti-dumping duties should be applied.

Under the European Commission's proposal, Brussels would use Russian price information rather than prices from Western producers to determine whether they are dumping goods.

Primakov told reporters yesterday when he arrived in Brussels that he thinks the first steps already have been taken to classify Russia as a "market economy" rather than a "non-market" country. He said the change would remove many obstacles to more active trade and economic relations between Russia and the EU.

Primakov said it is ridiculous to regard Russia as a "non-market economy" when about 70 percent of its official production comes from the private sector. He noted that many Central and Eastern European countries already have received the market classification.

EU exports to Russia last year amounted to $20.8 million. Russian exports to the EU last year were worth about $21.5 million.