Russia plans to raise customs tariffs for Estonia

TALLINN (ETA) - Russia's decision to raise import duties combined with double tariffs on Estonia will increase tariffs for Estonian producers by another six percent starting Aug. 15.

Urve Nõu, economic adviser of Estonian Embassy to Moscow, told ETA that starting the second half of August all Estonian goods exported to Russia will be levied with the new customs tariffs.

In case of countries that have most favoured nation status with Russia the increase in customs will be 3 percent, with the rest of countries, including Estonia, suffering a double increase.

Nõu said that Russia bases its customs policy on a law that concerns protection of Russia's economic interests. The aim of raising tariffs is to improve Russia's budgetary income that is demanded by the International Monetary Fund (IMF).

Margus Leivo, deputy chancellor of the Estonian Economics Ministry, has said earlier that the double tariffs are a discrimination against Estonia and are against the principles of World Trade Organization.

Russia, like Estonia, is also applying for WTO membership.

Estonian dairy producers are worried by of the expected rise, mainly because they currently sell their products in Russia at almost no profit.

Some dairy farms have warned that the purchase price of raw milk would have to be lowered to 10 percent. Others said that the hike would simply mean more profitable products, like sour cream, would be exported to Russia in bigger quantities.

Viktor Novokreshtshenov, director of the dairy products export company, Sivex International, said that the volume of Estonian dairy products exported would apparently not decline in August, but the structure of the products would be affected.

"The less profitable articles will be struck off the list and the share of more successful ones will increase," he said.