Russia rejects EU challenge in WTO auto row

(GENEVA) - Russia on Tuesday rejected a European Union attempt to get the World Trade Organization to settle their bitter dispute over car import duties imposed by Moscow.

The WTO said that Moscow's delegation had blocked the EU's call for the creation of a panel to rule on whether it was breaking global trade rules due to its controversial recycling fee, which applies only to imported vehicles.

Both sides have spent recent months trying to resolve the wrangling in direct talks, before the EU decided to take the dispute to the next level.

Under WTO regulations, member economies have one shot at stopping a dispute settlement process in its tracks.

But the EU has the option of making a second request, which under WTO rules cannot be blocked.

The dispute over Russia's car duties is the first since the country joined the global trade bloc in August 2012.

The EU made its initial complaint in early July this year, followed weeks later by Japan, though Tokyo has yet to request a panel.

Both Brussels and Tokyo take issue with what they say are Russia's attempts to disguise anti-competitive trade barriers as environmental protection.

Russia levies a recycling fee on imported and Russian-made vehicles alike, but exempts companies which commit to ensure that waste is safely handled.

The EU and Japan say the waiver only applies to companies which are legal entities registered in Russia and which pledge to produce vehicles or parts in Russia, Belarus or Kazakhstan.

Russia amended its legislation last week to apply the recycling fee to all vehicles.

But the change still needs the approval of Russia's upper house of parliament to come into force on January 1, meaning that the EU and Japan still have Russia on watch.

Disputes at the 159-nation WTO are often highly complex and technical, and can last for several years.