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Russia Faces First WTO Trade Dispute

Russian communist groups demonstrate against Russia joining the WTO in Moscow in July 2012.
Russia is set to face its first trade dispute at the World Trade Organization (WTO) since joining the global body a year ago.

European diplomats and Russia's Economic Development Ministry say the European Union will file suit on July 9 with the WTO to challenge a Russian law that imposes a fee on foreign auto manufacturers for scrapping old vehicles sold in Russia.

Moscow created the law to compensate for a reduction in import tariffs it was forced to accept upon joining the WTO.

European officials complain the new law discriminates against foreign companies and say the Russian government should pass a new law that applies the recycling fee equally to both domestic and foreign manufacturers.

This is the first action against Russia since it joined the WTO in August 2012 after 18 years of negotiations.

Based on reporting by Reuters, Interfax, and "The Wall Street Journal"