Round Timber and WTO

25.07.2008 (17:20)

The contradiction concerning increase of export duties on round timber was sharpened. European Commissioner for Enlargement Olli Rehn said that Russia will not join WTO till this problem is solved. Earlier Finland announced that transit tariffs for Russian cargoes will be increased.

Russia systematically increases export duties on round timber from the beginning of 2007. These measures will stimulate development of woodworking enterprises in the country instead of raw material squandering. According to the official statistics, the program yields results. According to the RF Ministry of economic development and trade, in January-February, 2008 the volume of commercial cellulose and newsprint export increased by 23% and 28.6% respectively. According to reaction of Finland, increased duties cause damage to national economy of this country. “Volume of round timber export from Russia decreased, and such companies as Stora Enso and UPM-Kymmene which buy a lot of round timber in the Russian Federation, show very bad financial results because the price of Russian timber increased”, the adviser of Northwest timber industry confederation Igor Ryvkin says.

“Finnish logging enterprises have good profits because price of the raw increased. The woodworking companies, including Stora Enso, have serious problems not only because of Russian duties. Nowadays world conjuncture on this market is very unfavorable. There are a lot of reasons: high rate of Euro, building crisis in the USA, and high cost of energy carriers etc.”, the expert working on the market of Russian-Finnish timber trade says on condition of anonymity. “Since January, 1 2009 timber exports from the RF will stop (when duties will increase to €50 for timber cubic meter). It will be serious problem for the Finnish woodworking enterprises, but they will solve it due to increasing volume of timber cutting in Finland and timber export from others countries. However it will be very big problem for the Russian enterprises”.

According to Minpromenergo, volume of round timber reduced: for example, in January-February 2008 it was decreased by 3.3% year-on-year. Are these figures correct? How many unaccounted, illegally logged timber was exported from the Russian Federation? “I think that the volume of illegal logging didn’t reduce”, WWF-Russia's Forest Programme Director Elena Kulikova comments on the situation. According to her, Rosprirodnadzor should control natural resources utilization but there is lack of staff. The quantity of the employees who struggle with illegal logging was reduced tenfold. Besides, new Forestry Code doesn’t include measures hampering illegal logging. According to the experts 15-20% of timber is logged illegally.

Thus, the volume of export is not accounted, the manufacture volume increases, the Finnish companies cope with the situation due to export from others countries. There is a question – why does the Russian policy on its own woodworking stimulation case such indignation? Maybe it is just pretext to prevent Russian Federation’s joining WTO?

Anna Nezhinskaya 

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