Translated material
Hatchet work
Russia will not abandon protective duties on the export of unprocessed wood
Russia appears to be changing some of its economic priorities. In particular, the intention to quickly join the World Trade Organization, repeatedly declared by officials, seems to be no longer so relevant. Yesterday, at the traditional meeting of the president with members of the cabinet of ministers in the Kremlin, “own interests” were rather straightforwardly opposed to Russia’s previous agreements with the European Union.The Government of the Russian Federation does not know how best to justify the introduction of protective duties on the export of unprocessed wood from the country , which began to operate on July 1 of this year and are designed for phased implementation until January 1, 2011. The point is not that the principle itself - the establishment of customs barriers - is bad for an open, liberal market economy. And the fact is that Russia simply violated its agreements with the countries of the European Union during negotiations on accession to the WTO.
Of course, “my forests are my wealth.” And, as Prime Minister Viktor Zubkov says, “today we are not getting what we should get from the forestry industry.” But to justify your own sluggishness by introducing prohibitive duties on the export of round timber by 2011 (they will amount to 80% for certain items), especially if you have previously agreed on other rules for entering the world market with a partner - in this case with the EU, at least unprofessional.
President Putin initially thought so when in May he gave the government the task of “sorting out” all the problems around forest duties with the EU. However, it did not settle down. And six months later, Mr. Putin decided to support the decisions of his ministers. “We have no desire to put our foreign partners in a difficult position, but we must think first of all about our own interests,” said the head of state. Moreover, this was said after negotiations between Prime Minister Viktor Zubkov and his Finnish and Canadian colleagues regarding the need for Russian export duties on unprocessed wood met with an extremely negative reaction. By his own interests, Mr. Putin, of course, meant the development in Russia of advanced processing of its own wood. “I really hope that we will be able to get this problem off the ground,” the president stressed to the ministers. “It is necessary to create conditions for the development of timber processing within the country.”
After which members of the cabinet immediately went to the White House to carry out the presidential instructions. Prime Minister Viktor Zubkov held a forestry meeting under the slogan: “Investors, we promise you not to cancel export duties in the long term (at least until 2011, when they finally come into effect), so come to us.” In other words, the cabinet members decided that the killer argument for the EU in favor of protective duties was that Russia would establish clear rules of the game for foreign investors in the domestic “timber” market.
In any case, Minister of Industry and Energy Viktor Khristenko, who presented journalists with an optimistic scenario for the development of our domestic advanced wood processing, presented the picture exactly like this. Answering a question from a Vremya Novostei correspondent about how the government, which wished to maintain protective duties, would continue to talk to the EU about the WTO, he noted: “Negotiations are a thing that must be conducted. But nothing is more important than clarity and stability for investors.” “There is nothing worse for investors than instability and uncertainty,” the minister reinforced his thought.
Along the way, the minister strongly emphasized the interest of foreign investors in investing in the Russian wood processing market. Mr. Khristenko said that the total investment could be more than 12 billion euros.