The European Union has decided to initiate a dispute with Russia within the framework of the World Trade Organization (WTO) due to the “discrimination” by state-owned companies from Russia to foreign suppliers, according to the a statement European Commission.
The publication claims that Brussels is requesting consultations that relate to certain measures on the part of Moscow. These measures, according to the EC, prevent European companies from selling their goods or services to Russian state-owned companies and other enterprises through commercial purchases. This practice, the commission believes, “apparently contradicts the WTO rules, according to which Russia cannot discriminate against foreign companies in this regard.”
The European Commission indicated that since 2015, Moscow has been gradually strengthening its import substitution policy using various bans and incentives to push foreign goods and services out of the procurement contracts of certain state-owned enterprises. In Europe, they said that the economic effect for European companies because of this was “very significant.” In 2019, tenders from state-owned companies were estimated at 23.5 trillion rubles, which is equivalent to 21 percent of Russia’s gross domestic product, the report says.
If the consultations on the settlement of the dispute are unsuccessful, the EU plans to seek the consideration of the issue by a panel of arbitrators. Earlier in July, the European Union stated that the legislation of Russia in the field of winemaking also causes concern, speaking of an “unfair embargo” against Brussels. Moscow, in turn, reminded the European Union of the need to comply with the WTO rules in connection with the intentions hitting Russian exports related to the plan to combat climate change.