Eastern European Markets
March 02, 2007

Ministry for Foreign Affairs Finland:
Negotiations concerning export duties on
roundwood and Russia's WTO accession negotiations

At the beginning of February, Russia announced its long-prepared plan to raise the export duties levied on roundwood. According to the plan, the first increases would take effect next summer, raising the minimum export duty from current four euros per cubic metre to ten euros per cubic metre. The minimum export duties would be further raised to 15 euros per cubic meter in April 2008, and at the beginning of 2009 the duty would be increased to 50 euros per cubic meter. At the same time, in addition to softwood, the export duties would be extended to birch timber with top diameter exceeding 15 cm and aspen, on which the lower export duty of five euros per cubic metre would be levied until the end of 2008. As of 2011, the minimum export duty of 50 euros would be levied on all timber.

Russian measures have an effect on about a fifth of Finnish forestry industry's raw material base for timber. In 2005, Finland imported the total of approximately 17 million cubic metres of unprocessed roundwood from Russia, corresponding to 80 percent of total wood imports.

The EU and Russia signed in May 2004 a bilateral agreement on the terms of Russia's accession to theWTO. Commitments made in accordance with the bilateral agreement would guarantee the continuation of, from our point of view, significant exports of timber from Russia after Russia's entry to the WTO. Russian decisions to raise the export duties are not in harmony with the bilateral agreement between the EU and Russia. Thus, the question is finding a solution to the situation before Russia's entry to the WTO.

Finland's goal is to secure that wood exports from Russia continue undisturbed in accordance with the agreement on the terms of WTO membership between the EU and Russia.

Further information
Additional information:
Director Ilkka Saarinen, tel. +358 (0)9 1605 6327
and Commercial Counsellor Johanna Ala-Nikkola, tel. +358 (0)9 1605 5539
Unit for Market Access, Ministry for Foreign Affairs

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