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EU/RUSSIA: MOSCOW ACCUSES UNION OF TAKING BACK MARKET ECONOMY STATUS.

Russian diplomats are warning that planned changes by the Commission to its anti-dumping legislation would nullify the benefits of EU's offer to grant Russia Market Economy Status (MES). Russian officials say that modifications to the EU's anti-dumping Regulation 348/1996 which are currently being discussed in the Anti-Dumping Committee of the EU Council of Ministers, would result in Russia being denied MES in practice. Commission President Romano Prodi offered MES to Russia at the Moscow EU-Russia summit in late May, with implementation promised for the autumn after the decision has been formally approved by the Council. Granting the Status would put the onus on the EU to prove on a case by case basis that Russian exporters were not being unfairly subsidised. At present the exporters have to prove individually that they operate in a free market environment in order to avoid anti-dumping duties. The draft amendments to the Regulation which gives Russia MES also adds several other clauses which "provide for a clarification" of how to treat "market impediments" which may "result in domestic prices being out of line with world-market prices". These impediments include "the existence of barter-trade and other non-commercial processing arrangements", unreliable economic data, and payment of commissions.Russians diplomats believe these amendments may be backed up by another Regulation that specifically defines double pricing of energy as a state subsidy, and "compensates European producers". The main argument within the EU against granting Russia MES was that the government fixes a lower energy price for domestic consumers than for foreign ones. According to EU sources, Commission officials responded to complaints from Member States about the granting of MES at Moscow, by promising to add "a new clause, applicable to all countries" in the anti-dumping Regulation. This would "take account of the 'special' Russian market factors" like double pricing and importer-producer collusion to get around anti-dumping restrictions...JJ:(RMM)

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Publication:European Report
Article Type:Brief Article
Geographic Code:4EXRU
Date:Jul 27, 2002
Words:312
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