August 24, 2012

Russia's pork import duty down to 65% until 2020

Following formal accession to the World Trade Organisation on Wednesday (Aug 20), Russia's pork import duty was lowered from 75% to 65% which will apply until 2020, when the duty will be lowered to 25%.

Kalle Nolvak, chief specialist at the office for trade and alcohol market regulation at the Estonian Ministry of Agriculture, said that for protecting its meat products market Russia chose the preservation of high import duties for ordinary imports and opening of tariff quotas, which are significantly more favourable. "For compensation, an annual tariff quota for pork of 400,000 tonnes overall to which no duty is applied will be made available to trading partners, including the EU," he said.

For beef, Russia is opening tariff quotas with an import duty of 15%. "As a minor exception, the EU will get a separate right to import 29,000 tonnes of fresh beef and 60,000 tonnes of frozen beef," Nolvak said. "For the import of poultry meat Russia must open tariff quotas with an import duty of 25% and for the EU a separate quota of 80,000 tonnes will be opened."

Unlike in the case of pork, the WTO agreement does not set out an obligation in the case of beef and poultry meat to lower the applicable customs duty and give up tariff quotas by a certain time point. A possibility to do it has been set out in the agreement, however, the Estonian ministry said.

Nolvak said that transition periods for various products will end in the case of Russia at different times, in the period from 2014-17. "Some changes took place effective from Wednesday (Aug 22). The customs duty for milk powder, for instance, was lowered from 25% to 20%," Nolvak said. By the year 2016 the rate of the duty must be 15% and cuts to move toward that objective must be executed annually.

Nolvak said that to milk, butter and cheese Russia continued to apply the duty that it used to apply also before accession, the rate of which is very close to the final goal of 15%.

"First and foremost WTO is a set of rules drawn up and agreed on the initiative of the countries that are its members, and solving of problems depends on how precisely rules are followed," Nolvak said. "Estonia will have a much stronger legal base at its disposal to demand the abolition of non-permitted trade restrictions, for instance," the official said.

Upon accession to WTO Russia must level off Value Added Tax (VAT) for domestically produced and imported goods, and do away with groundless requirements as regards licenses, certificates and other similar documents. "Apparently we don't have to fear tariff hikes for restriction of trade in the future," he added.