The EU will begin verification in connection with the termination of anti-dumping measures in relation to the import of ammonium nitrate from Russia, which were extended in 2014. This is stated in the notification of the European Commission, the text of which was reviewed by RT. The extension was designed for five years, and the restrictions expired at midnight on September 25th.
A verification request was submitted on June 21 by the Fertilizers Europe Fertilizer Industry Association. The document states that the expiration of the measures may lead to the alleged continuation of dumping by Russia and the occurrence of "damage" to European manufacturers. The object of consideration is solid fertilizers with a content of ammonium nitrate above 80% of the total mass.
In addition, the European Association is also concerned that if anti-dumping measures are lifted, the level of export of such products from Russia to the European Union “will probably increase”.
“The applicant claimed that there was a likelihood of recurrence of damage. In this regard, he provided sufficient evidence that, if the measures are canceled, the current level of imports of the products in question from the respective country in the EU is likely to increase, ”the notification of the European Commission says.
According to the document, this is due to the presence of significant unused capacities of manufacturers-exporters in Russia, which "presumably account for about 19.5% of the total EU consumption."
Such an investigation, as indicated in the notification, will take a year and cover the period from July 1, 2018 to June 30, 2019.
It is worth noting that Russian ammonium nitrate is not the first time becoming the object of restrictive measures of other states. So, on September 12, the WTO appeals body upheld the arbitration award on Russia's victory in a dispute with Ukraine on duties on ammonium nitrate.
Recall that in July 2014 Ukraine more than tripled the duties on the import of ammonium nitrate from Russia (from 11.91 to 36.03%) and extended their validity by another five years. The dispute was initiated by Moscow in 2015.
In July 2018, the World Trade Organization (WTO) panel recognized Russia was right in a dispute with Ukraine regarding the use by the Ukrainian side of anti-dumping measures against Russian-made ammonium nitrate.
As noted in the Ministry of Economic Development of Russia, such a decision by the appellate body increases Moscow's chances in an important dispute with the EU on the application of the energy adjustment method.
So, in a dispute with Ukraine, the so-called energy adjustment methodology was used to calculate the cost of Russian products, in which prices in third countries are used instead of energy prices on the Russian market.
“The decision of the arbitration group and the appeals body indicates that the application of the EU methodology also does not comply with WTO standards and increases Russia's chances of successfully challenging European anti-dumping measures. The dispute against the EU was initiated by Russia in May 2015, the energy adjustment methodology itself is being appealed, as well as the extension of the antidumping duties calculated with its application based on the results of planned revisions of antidumping measures in relation to Russian ammonium nitrate and welded pipes, ”the Ministry of Economic Development noted.
Now the EU has four anti-dumping measures introduced with the use of energy adjustments - in relation to ammonium nitrate, welded and seamless pipes, as well as a preliminary measure in relation to the urea-ammonia mixture.
- WTO Headquarters in Geneva
- Reuters
- © Denis Balibouse
The European Union has traditionally acted in the interests of other players, not Russian suppliers, says Vasily Koltashov, head of the Center for Political and Economic Research at the New Society Institute.
“The EU seeks to ensure a more favorable position in the world market for its own producers and other exporters, but not Russian ones. Russia, as usual, is infringed on interests, not looking at the fact that this kind of interference in a purely commercial issue is contrary to all WTO rules, but everyone has begun to forget about it. The European Union, as it was a protectionist figure rigidly acting against Russia, remains so, ”the expert said in an interview with RT.
Proximity of markets
At the same time, as stated in the notification of the European Commission, it is also assumed that the flow of imports of the goods in question to the countries of “united Europe” may also increase due to the fact that “the EU is the most attractive market for Russia”, as well as due to geographical proximity. And this factor in the document is associated with supposedly possible damage after the cancellation of antidumping measures.
After the lifting of restrictions, supplies from Russia to the European Union could increase, however, Brussels continues to accuse Moscow of dumping, Vasily Koltashov notes.
“This charge is standardly based on an allegedly understated ruble exchange rate, although in reality we are dealing with an overvalued euro. And the overvaluation of the euro is ensured by the large development of the financial market and huge "bubbles" in the financial market. A huge layer in the concentrated financial sphere rotates in the zone of fictitious capital, that is, in the zone of securities, and this creates a high euro exchange rate. It also creates expensive labor in the EU and makes production in Europe inefficient. But it turns out that Russia is “to blame”, because, it turns out, we are “dumping”. Now our course corresponds to the state of the markets. And whose course is inadequate is the euro exchange rate, ”he said.
According to the economist, professor of the Russian Presidential Academy of National Economy and Public Administration under the President of Russia Vladislav Ginko, the existing measures create an artificial barrier to the interaction of producers and consumers in Europe.
“When our European partners are faced with the fact that Russia can produce goods cheaper and better, a reaction immediately arises that it is necessary to conduct an investigation and this cannot be. These are realities, and not only Russia is facing this. This means that if some country in Europe or the United States has some kind of “leverage” as they think, then, accordingly, you can try under the guise of anti-dumping duties to prevent competitive products. These are discriminatory measures, otherwise it cannot be called, ”the expert concluded.