The EU intends to continue consideration within the WTO dispute over restrictions on pork supplies introduced by Russia in 2014, before the food embargo began. Earlier, the WTO has already recognized these restrictions as illegal, but now the EU expects to receive compensation for the losses incurred by imposing retaliatory restrictions on Russian imports worth € 1.4 billion. The Ministry of Economics of the Russian Federation does not agree with the EU's claims about the non-fulfillment of the WTO decision, this allows the possibility of discussing the amount of compensation.
The European Union's request to the WTO to allow the introduction of measures that compensate the losses of European pork producers from phytosanitary restrictions imposed by the Russian Federation in January 2014 will be considered by the arbitration of this organization, the Ministry of Economics of the Russian Federation reported. This decision was made at a meeting of the WTO dispute resolution body on January 3 - after the Russian side did not agree with the EU position. "In accordance with the practice and procedures of the WTO, Russia will participate in arbitration to assess the adequacy of the EU request, and in accordance with the established rules of the organization, initiate arbitration proceedings aimed at establishing the fact of Russia's implementation of all paragraphs of the decision of the dispute resolution body," the ministry said. .
Recall that in February 2017, the WTO appellate body recognized as discriminating the Russian ban on the supply of pork, products from it, as well as live pigs. The arbitrators pointed out that the restrictions were "unjustifiably high", since outbreaks of the African swine fever virus (ASF) were registered in only a few EU countries close to the border with Belarus, the prohibition on supplies from all countries of the union (this is considered a violation of the principle of regionalization within the framework of agreement on the application of phytosanitary measures).
Now in Brussels they want to get an opportunity to introduce a reciprocal trade restrictions on imports from Russia in the amount of lost profits - it was estimated at € 1.39 billion (the volume of exports of pork for 2013, taking into account an annual growth of 15%).
The European Commission indicates that Russia had to comply with the decision before December 6, 2017 and allow the resumption of trade. However, at the end of December, referring to the failure of the Russian Federation to implement the decisions of the appellate body, the EC announced its intention to convene a panel of experts to provide the EU with the possibility of introducing retaliatory measures.
The Ministry of Economics of the Russian Federation, however, declares that Russia has already fulfilled the decision of the appellate body by lifting the ban on the importation of pork from the EU countries because of the African swine fever. The notification was sent to the WTO on 8 December. Deliveries are not renewed for another reason - due to the continuing food embargo of August 2014. Note that earlier in Brussels they hoped to resume supplies of pig fat, giblets, as well as live animals for breeding, which were subject to phytosanitary restrictions, but not subject to sanctions.
According to Maxim Medvedkov, the director of the trade negotiations department of the Ministry of Economics, the claims for compensation of € 1.39 billion a year are "groundless". The agency plans to convene a new panel of arbitrators to recheck the already fulfilled requirements of the WTO. "Our counter-move is a requirement to convene a panel to determine whether Russia has fulfilled the arbitrators' decision or not. It is clear that without such a definition, no response measures should be introduced. At the same time, we will take part in the discussion of the volume of alleged compensations, "Interfax quotes Mr. Medvedkov.
Sergei Afontsev, head of the economic theory department at the IMEMO Academy of Sciences, notes that if the EU manages to prove the illegality of the restrictions within seven months - from the time they were introduced by the Rosselkhoznadzor to the adoption of counter-sanctions - then Russia will have to compensate for the losses suffered by European companies. "The EC plans to do this in the form of a recall of individual preferences. But there is a certain difficulty associated with calibration - and there is a risk that they will recall more significant preferences than those that are equivalent to the size of the damage, "the expert warns. At the same time, the amount of damage can be revised - from August 2014, deliveries were limited to the product embargo, which, like the EU sanctions, was introduced with reference to national security, is an "unshielded argument" within the WTO, which no one has yet been able to challenge, explains Sergey Afontsev.