The European Parliament adopted an international agreement today between the EU and Russia on the management of tariff rate quotas applying to wood exports.

Inese Vaidere MEP, responsible for the dossier, welcomed the Parliament’s decision. “We have reached turning point in EU-Russia trade relations and for the first time, the EU will be administering a third country’s tariff rate quotas.”

Tariff rate quotas with significantly reduced in-quota export duty rates (13% for spruce; 15% for pine) will open an opportunity for EU producers to increase the volume of wood imports from Russia. Currently 10% of the EU woodwork industries’ raw wood material is imported with Russia being the largest supplier of 60% of all imported wood. However, the amount of imports was much higher before Russia first introduced export duties on spruce and pine in 2007. The total EU imports of spruce and pine from Russia were subsequently reduced by around 80%.

Inese Vaidere MEP believes the agreement is significant to European producers: “Russia is an important partner for the EU wood industry. The reduced in-quota export duty rates will certainly boost wood imports from Russia and possibly the import will bounce back towards its pre-2008 figures.”

Mrs Vaidere estimates that the total annual EU spruce and pine imports from Russia can increase significantly under the tariff rate quotas. If imports could move again towards the rather high 2007 level, EU imports of spruce from Russia could increase by approximately €100-175m and EU pine imports by approximately €80-130m annually as compared to respective imports in 2011. Overall annual EU spruce imports from Russia may thus reach a level of €150-220m, whereas annual EU pine imports from Russia could increase to a total of around €110-160m. Compared to the previous export duty rate of 25% that Russia applied to both spruce and pine exports before the WTO accession, annual savings for EU importers due to reduced export duties within the tariff rate quotas could amount to around €18-25m for spruce and around €10-15m for pine.

In addition, the Protocol between the EU and Russia foresees the detailed technical regulations of the shared management of the tariff rate quotas. Mrs Vaidere said: “The Protocol is an important asset for the stability and reliability of trade relations.”

“The fact that the EU has reached another trade agreement with Russia is a step towards more stabile and predictable bilateral trade”, Inese Vaidere concluded.