Russia joined the WTO in August 2012 after negotiations, which spanned 18 years. High Russian customs duties, which were are strain on trade, fell as a result of membership. Russian import duties on forest industry products fell by some five percent, while the euro amount of export tariffs levied on raw timber halved.
Lower Russian import duties boost demand for forest industry products and improve the status of Finnish products in the Russian market as the Finnish mills are closer than those of our competitor countries. Exports of paper and paperboard products have increased by five percent this spring relative to spring 2012. Russia’s share of forest industry exports has grown slightly.
Raw timber imports from Russia to Finland have started to grow. Birch imports have increased steadily since Russia joined the WTO last autumn and softwood imports have started to grow powerfully after some initial hiccups. The importing of softwood with lowered Russian export tariffs is based on a system of quotas, whose administration should be developed further to facilitate smoother trade. Negotiations concerning the improvement of this quota system continue between Finnish, EU and Russian officials.
Room for improvement with WTO agreement compliance
Russia has in part failed to implement WTO customs duty rates in order to protect its own industrial production. The import tariffs levied on forest industry products have likewise been higher than required under the WTO agreement. The matter of Russian tariffs associated with the forest industry has been the subject of negotiations and, this spring, Russia cut the import duties of certain paper and paperboard products to comply with the WTO agreement.
The lower level of customs duties brings the Finnish forest industry tens of millions of euro in annual savings. More active forest industry trade between our countries also benefits the people of Russia, strengthens the forest-based sector and boosts stumpage fee revenues in Northwest Russia. In addition, it increases the use of environment-friendly and recyclable paper and packaging products.
Mr. Jukka Halonen, Manager, Russian Affairs, Finnish Forest Industries Federation, tel. +358 9 132 6682, +358 50 591 1090