EU Eases Its Stance on Scrap Metal Tax

The European Commission might be willing to ease back on its demands for Moscow to completely lift Russia's export tariffs on scrap metal as part of their bilateral trade talks, a commission spokeswoman said Tuesday.

The European Union is one of Russia's main trading partners and Moscow has to negotiate an accord with the bloc to enter the World Trade Organization.

"We always lay in the maximum we can, and our point of departure is an end to Russia's scrap metal export tax, but we are not done with these negotiations," trade spokeswoman Arancha Gonzalez said.

She responded to remarks by Russia's chief WTO negotiator, Maxim Medvedkov, who said Friday that the EU's demands were unrealistic and that a complete lifting of the duties would be impossible.

"There are other tariffs on other products to consider and we will only conclude a deal in the context of that and if the overall package is in the EU's greater interest," she said.

"It's too early to say whether we will accept this."

The EU demand on scrap is part of wide-ranging trade talks.

Russia's export duties on scrap metal exports include copper and aluminum that have an export duty of, respectively, 50 percent and not less than 420 euros per ton, and 30 percent and not less than 380 euros per ton.

Other scrap metals affected by export duties are nickel, lead and zinc, which all carry a tariff of 30 percent or not less than 720, 105 and 180 euros per ton, respectively.

Around 55 percent of Russia's total export trade is with the EU, Gonzalez said.

However, a spokesman at Russia's trade mission in Brussels said trade talks could be protracted, given that any trade agreement may be years away.

"Our accession to the WTO could take two years," he said.

"We had talks with the EU in Moscow a few days ago but no further talks are yet scheduled. On one hand we have the commission and on the other we have the metallurgical industry [scrap consumers] that have asked for the tariff charges to be tripled.

"The government is always thinking about these things and I have nothing really to add to Medvedkov's comments."

Russian scrap traders, particularly in higher-priced non-ferrous markets such as copper and aluminum, are widely against the scrap duties, complaining of lost revenue in more lucrative markets such as the EU.

Russia's tariffs started around four years ago and have been largely unopposed because of the disparate nature of the Russian scrap industry, but that may be changing.

Russian trader Ildar Neverov, also ambassador for Russia to the Bureau of International Recycling, an international Brussels-based scrap organization, said opposition in the Russian scrap market was gathering momentum.

"For the first time, we are on our way to establishing a Russian scrap organization," he said, adding that he hoped it would be legally incorporated by the autumn.

"It gives us a platform to take our arguments to the government rather than as individual companies," he said. Reuters