Russia delays tariff decision

RIGA - Russia has decided to delay abolishing differences in the prices it charges for transporting goods by train to its own ports and the prices it charges to transport goods to its borders with such countries as the Baltic states for onward transit.

Equalization of tariffs was to occur in March as part of Russia's efforts to be admitted to the World Trade Organization but has now been delayed until July.

German Gref, Russia's minister of economic development and trade, told the Avotransinfo agency in Russia that the ministry will now wait before making a decision.

According to Latvia's Foreign Ministry the issue of Russian railway tariffs is crucial to Russia's membership talks.

Currently it is 11 percent cheaper to transport cargo from Russia by train to its own ports than it is to transport it to Latvian ports.

Despite this week's announcement there are still uncertainties about what will happen.

"As far as I know the tariffs will be changed according to a decision made by the Ministry of Economic Development and Trade in Russia, but I don't know exactly which month it will happen," Vladimir Borisov, commercial attache at the Russian trade council in Riga, said.

"The tariffs will be the same for both export and import, and this will mean that competition on the Russian market will be much tougher."

However, Borisov did not know what sort of demands have been made by the WTO or what role the organization was playing in the matter.

Latvian Foreign Ministry's spokesman Uldis Vitolins was unavailable for comment but the Foreign Ministry's Internet home page says that Latvia favors simplifying trade procedures, reducing amounts of documentation and increasing transparency in line with WTO principles.

The Latvian state railway company Latvijas Dzelzcels says it supports equalization of Russian railway tariffs because this would create equal chances for companies to compete.

Last year Latvijas Dzelzcels carried almost 39 million tons of cargo from Russia to Latvian ports, 4 percent more than in 2000. But toward the end of the year the situation worsened. In December the company carried 16 percent less cargo than it did in the previous December.

"If Russia equalizes its inland carriage tariffs, it will improve Latvijas Dzelzcels' and Latvian ports' competitive capacity," said Kaspars Kreics, spokesman for the Latvian railroad company.

"It also means our company could win more clients."

Should the Russian tariff system stay in place, companies which are in a position to choose which ports to use for shipping their cargo will benefit.