Minister for Foreign Trade and Development Paavo Väyrynen’s statement on wood tariffs

Press release 233/2008
26 June, 2008

Elvira Nabiullina, Minister for Economic Development and Trade of Russia, called me in the evening yesterday and announced that our proposal for a tariff scheme for birch based on end use cannot be realised. As grounds she stated that the scheme should also be applied in exportation to China, for which monitoring cannot be organised in practice. Minister Nabiullina said that a solution needs to be sought through WTO negotiations.

Minister Nabiullina’s announcement is very unfortunate, and the grounds she presented are not understandable. A scheme based on end use could be taken into use in general, and then applied as each country’s own monitoring system becomes operational.

A permanent solution to the issue of wood tariffs should be found as part of Russia’s WTO membership negotiations. From the perspective of Finnish industry, however, the situation is becoming totally unbearable. Because sorting of birch has not been implemented, in practice industry has to pay export tariffs on nearly all wood imported, and at the start of next year the amount will rise to 50 euros per cubic metre.

In the current situation the Ministry for Foreign Affairs has decided to investigate whether the export tariffs paid by industry can be repaid from Finnish State funds. The refund could apply to tariffs exceeding the level set in the agreement reached between the EU and Russia in 2004. The Ministry is also investigating whether the refund of export tariffs could be financed by adopting a vehicle-specific transit fee for transports to Russia by way of Finland.

An arrangement of this type would be justified also because transit transport poses considerable expenses for the State and municipalities, and at present these expenses are not covered at all.

A system of tariff refunds and transit fees could come into force next autumn. If the increases in wood tariffs are implemented at the beginning of next year, the transit fees could be raised.

Additional information: Ossi Martikainen, Senior Adviser to the Minister, mobile tel. +358 40 592 6769