EU Criticizes Russian Tax Hike on Imported Cars

New measures would increase duties by $400-500 million per year

The European Commission on Jan. 12 slammed Moscow's decision to hike import taxes on cars, saying the move ran counter to Russia's bid to join the World Trade Organization (WTO). "The commission very much regrets the introduction of additional import duties on new and used cars," said Peter Power, spokesman for EU Trade Commissioner Catherine Ashton.

He said the new measures would increase the duties by 300-400 million euros (US$400-530 million) per year, thereby posing a new problem for Europe's struggling car industry.

Last month Russian Prime Minister Vladimir Putin announced the temporary increase in import tariffs on foreign cars -- notably from neighbouring Japan -- in a bid to help Russian automakers. Putin described imports of foreign cars as "absolutely inadmissible" in times of crisis.

However Power said the scheme, which came into effect on Jan. 12, ran counter to terms of a 2004 agreement with the EU which was signed as part of Moscow's bid for WTO membership.

Russia is the largest world economy still to be admitted to the WTO. Initial membership negotiations started in 1993, but were suspended in August by Washington and Moscow at the height of a Russian-Georgian territorial conflict.

Copyright Agence France-Presse, 2009

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