Reports: EU Will Hike Tariffs on Russian Goods
News operations in Europe reported that the EU began the process on March 4 of ending most favored nation tariffs on Russian goods. A European Commission spokesperson confirmed the reports to Export Compliance Daily on March 7. "There was broad support within the Trade Policy Committee regarding actions taken by Russia that would justify the non-application of MFN vis-à-vis Russia," the spokesperson said. "There was strong support to work with likeminded countries on a joint statement and a willingness to take appropriate trade measures as an action. This is now work in progress. From the EU perspective, such measures would be adopted on the same procedures as those that were used to adopt the previous rounds of sanctions."
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Under World Trade Organization rules, countries are supposed to charge the same tariffs on goods from all WTO member states, but the General Agreement on Tariffs and Trade, which preceded the WTO's founding, said that principle could be abrogated in a time of war. Ukraine has notified the WTO it will no longer be giving Russia MFN status, and asked other countries to vote to kick Russia out of the WTO.
Canada has already ended MFN status for Russian goods, and the U.S. is considering similar legislation. The U.S. bill also instructs the U.S. delegation to Geneva to lobby other countries to remove Russia from the WTO.
A Geneva trade reporter shared Russia's response on Twitter, which said there is no legal ground for suspending Russia from the WTO, and such an action is not provided for in the charter establishing the organization. Former WTO appellate body member Jennifer Hillman, now a law professor at Georgetown University, recently said (see 2202280050) that although there is no procedure to kick a country out of the WTO, she thinks removing MFN would be easily justified under Article XXI of the GATT. "However, as the [U.S.] bill suggests, if many more countries just raise their tariffs on Russian exports, then Russia has lost one of the major benefits of being a WTO member."