Russia suspends safeguard duties on imported harvesters pending review

25.07.2013

Source: International Trade Reporter: News Archive > 2013 > 07/25/2013 > Europe > Agriculture: Russia Suspends Safeguard Duties On Imported Harvesters Pending Review

By Daniel Pruzin

GENEVA—Russia has told members of the World Trade Organization that it has suspended the application of additional duties on imported combine harvesters and harvester modules pending a review of the measure by a customs union body.

In a notification circulated to WTO members July 15, Russia said the decision by the Eurasian
Economic Commission (EEC) to impose a three-year safeguard on imported harvesters has been suspended pending consideration of the measure by the Supreme Eurasian Economic Council. The EEC was established in February 2012 as the permanent regulatory body for the customs union created by Russia, Kazakhstan, and Belarus.

The safeguard duties were due to take effect July 26 and were to replace a provisional 27.5 per cent safeguard duty that has been in place since Feb. 25. The new duty was to be fixed at 26.7 per cent through March 14, 2014, then 26.2 percent through March 14, 2015, and finally 25.7 percent through March 14, 2016, after which the duties would expire. The three-year safeguard duty would have been imposed on imports from all developed countries and China.

Citing Serious Injury as Justification

The EEC concluded that combine harvesters were being imported in such quantities and under such conditions as to cause serious injury to harvester manufacturers in the customs union, thus justifying the safeguard measure. It noted that the number of imported harvesters jumped by 93 percent in the first half of 2012 compared to the same period in 2011.

Vladislav Safonov, senior associate for the Customs and International Trade Practice at the Moscow law firm of Goltsblat BLP LLP, said the review by the Supreme Council was prompted by a request from the prime minister of Kazakhstan for the annulment of the safeguard.

The EEC's decision to impose the safeguard “obviously runs counter to the economic interests of Kazakhstan,” which has substantial farmlands and is interested in having quality imported grainharvesting equipment, Safonov said.

In addition, violations were committed during the safeguard investigation that invalidated the grounds for applying the measure, Safonov said, adding that Kazakh officials tried to prevent the EEC from adopting the measure when it was being considered within the commission.

The Supreme Council, which meets at head of government level, may abolish or amend any EEC decisions upon request from any of the customs union's three members, Safonov noted. Unless an extraordinary meeting is convened, the next Supreme Council meeting is planned for September-October 2013, at which time Kazakhstan's request for annulment of the safeguard would be considered.

According to U.S. government figures, the U.S. share of Kazakhstan's agricultural equipment imports plummeted from 35 percent in 2009 to 17 percent in 2010, mainly as the result of its customs union with Russia and Belarus, which raised import tariffs on most agricultural machinery and equipment imported from outside the customs union. The tariffs increased by 15 percent on average.

Russia imported an average of $316 million worth of U.S. farm equipment each year between 2008 and 2010, making it the fourth - largest market for U.S. agricultural equipment exports.

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