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11 July, 2013 16:05   ▪  

Russia targets Ukrainian chocolate in car trade spat

Russia plans to put trade sanctions on Ukraine, penalising imports of chocolate, coal and glass in retaliation for a Ukrainian emergency import tax on cars which has drawn World Trade Organisation opposition, Reuters reports

"Ukraine imposed the emergency car tax under the WTO "safeguard" rules, which allow countries to protect a sector if there is a threat of serious damage to producers from a surge in imports. But there are strict rules about their use, which Ukraine is accused of ignoring," Reuters reports.

Russia said its proposed tax on Ukrainian imports would come into force as soon as it was adopted by the Customs Union, which also includes Kazakhstan and Belarus.

READ ALSO: The Mythical Benefits of the Customs Union

Russia is the second of five concerned WTO members to spell out how it plans to punish Ukraine over the car tax. In a WTO filing published on Tuesday, Russia said the Ukrainian car tax would hit Russian car exports worth $328 million, raising $36 million of tax. To offset this, it said it reserved the right to impose a duty of 0.1 euros per kilogramme of Ukrainian chocolate, 15 percent on glass and 54 percent on coal.

READ ALSO: Taxes and Nothing Else

Diplomats say the car tariff is part of a pattern of aggressive and eccentric behaviour by Ukraine, which is vetoing Yemen from joining the WTO, pursuing a legal challenge to Australian tobacco laws and undermining the WTO system by demanding a far-reaching renegotiation of its tariffs.

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