Norway of beef, pork, poultry, fish, sausages and meat products, vegetables, fruits and nuts, and milk and dairy products. The ban is to expire in one year. In ideal cases, the Dispute Resolution Mechanism with appeal requires about 15 months and in practice can take many years when the parties strongly disagree. Moreover, Russia has invoked national security concerns in connection with the ban, which is understood to be retaliation for economic sanctions imposed by the targeted parties as a result of the conflict in eastern Ukraine. The WTO agreements contain a broad exception for countries to determine what national security measures they apply to trade (GATT 1947, Article XXI (b)(iii)). Such claims have rarely been challenged, and there is little WTO jurisprudence on the contestability of national security measures.

Some of the products covered by the August 7 ban were already excluded by Russian SPS policy, most notably live pigs, pork, and pork products from the EU; these amounted to $1.3 billion of Russian imports in 2013, compared to the entire $9.6 billion of imports covered by the August 7 ban. The SPS and other Russian policies would presumably stay in place after the August 7 ban expires.

# **3.4 Other Concerns**

## **Tariffs**

The ECU introduced new compound tariffs, adding a minimum specific duty to ad valorem rates, in 2013 (United States Trade Representative (USTR) 2013: 3). These tariffs cover both agricultural and industrial products. Japan’s Ministry of Economy of Trade and Industry (JMETI) identified this as a priority issue in May 2014. One example that affects Japan has to do with large-capacity refrigerators. The WTO bound duties for these was 20 percent in 2013 and is scheduled to decline to 13.6 percent by September 2016. The applied rates read “20 percent, but not less than 0.24 euro per 1 liter” in August 2012 and “18.3 percent, but not less than 0.16 euro per 1 liter” in August 2013. JMETI states that Japanese companies are overpaying duties, and that applied rates exceed bound rates for some 200 items, which includes cheese, pulp, and secondhand cars. The U.S. has also expressed concern that the compound tariffs may exceed Russia’s WTO bound rates (USTR 2013:3).

In addition to compound tariffs, other concerns have been raised about Russia’s compliance with its WTO tariff commitments. The EU Market Access Database (MAD) says that Russia has “corrected” (abolished or introduced) a total of 1,576 HS codes relative to its 2007 tariff schedule, including tariff sub-codes (presumably national tariff lines below the HS-6 level). The MAD characterizes this as “manipulation” to avoid implementing the tariff commitments. The MAD also states that Russia’s import duties on coated paper and cardboard in the Single Customs Tariff were three times higher than committed (15 rather than 5 percent).<sup>38</sup> In July 2013, the EU requested WTO consultations regarding Russia’s auto recycling fees. The EU argues that these fees apply only to imported vehicles and not to domestic or ECU vehicles, and thus undermine Russia’s MFN obligations with respect to its tariff schedule, as well as raising TBT issues.<sup>39</sup>

> 38 <u>http://madb.europa.eu/madb/barriers_details.htm?barrier_id=060014&version=17.</u>

> 39 <u>http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds462_e.htm.</u>

RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP 19