(Reuters) - With the goal of spurring investment in wood-processing capacity in Russia, Moscow put incremental tariffs on timber exports in 2007, triggering a row with the European Union. Following are some key facts about the dispute:
* RUSSIA'S WOOD EXPORT DUTY:
-- The Russian duties have now reached 15 euros per cubic meter and are set to rise to 50 euros from January 1. This would roughly double wood costs for Nordic paper mills.
-- Russia is the world's largest exporter of roundwood, accounting for a quarter of world export value. In 2005, Russia exported nearly $2.9 billion worth of roundwood.
* WHO IS AFFECTED?:
-- FINLAND - Finnish paper makers bought more than 12 million cubic meters of timber last year from Russia and the new tariffs could cost the industry more than 500 million euros ($735 million) annually.
-- Finland's forest industry employs about 200,000 people. The Bank of Finland has said the higher duties could lead to job cuts and lower national economic output.
-- Finnish media have estimated up to eight major plants could close in eastern Finland due to a lack of raw materials, costing about 16,000 jobs.
-- SWEDEN - Sweden, which also has a large timber industry, shares Finland's frustration and is critical of Russia's policy. Sweden employs 90,000 workers in the forestry industry, or 1 percent of the population, and is concerned export duty increases by Russia could cost it jobs at home.
* WTO ACCESSION ROW:
-- Finland said it would impose a tariff on goods transported across Finland to Russia to compensate its paper makers, worsening a crisis that has threatened to delay Russia's WTO membership.
-- The EU has said Finland's tariff proposal could be counter to core European Union rules, but maintains that Russia's decision to increase export duties for timber breaches a 2004 bilateral WTO deal. Russia denies it.
-- Russia is the only major international economy which is not yet a member of the WTO. Under WTO rules a candidate country must reach agreement with all 153 members, represented by a working party which any existing member can join, as well as sign separate bilateral deals with any member that seeks them. Georgia, which this month has clashed militarily with Russia over the breakaway Georgian province of South Ossetia, is also a member of WTO.
-- The European Union's enlargement commissioner said last month Russia could not join the WTO until the dispute over wood export duties was resolved.
* EU-RUSSIA TRADE:
-- The EU is by far Russia's main trading partner, accounting for 51.5 percent of its overall trade turnover in 2007. It is also by far the most important investor in Russia. Continued...
© Thomson Reuters 2009. All rights reserved.
| Aerospace and Defense | Dec 15 - 17, 2008 | Aerospace/Defense |
| Investment Outlook | Dec 08 - 11, 2008 | Financial Services / Exchanges |
| Media | Dec 01 - 4, 2008 | Media/Tech/Telco |
| India Investment | Nov 24 - 26, 2008 | Country Summits |
| Health | Nov 17 - 20, 2008 | Health |
