“I remain hopeful, although there have been many disappointments hereâ€, said Minister of Foreign Trade Paavo V?yrynen in Moscow on Monday after meeting with Russia’s Minister of Economic Development, Elvira Nabiullina.
The most important topic of the meeting involved the export tariffs imposed on raw timber by the Russian government, which is a major cause for concern within the Finnish pulp and paper industry, which buys Russian wood in large quantities.
Russia plans to raise the tariff to EUR 50 per cubic metre by early next year.
“That is a completely impossible tariff levelâ€, V?yrynen said, adding that “the fateful moments for the industry are in the coming weeksâ€.
If Russia does not back down on its plans to raise export tariffs, V?yrynen says that Finnish forest companies “will have to plan for the shutting down of factories, or to convert them for the use of coniferous wood.â€
According to V?yrynen, the problem is that the wood tariff issue is tied to Russian membership in the World Trade Organisation.
V?yrynen held talks with Nabiullina on two options, both of which the Russian government is considering, V?yrynen says.
First of all, Finland hopes that it could be allowed to import birch logs with a diameter of less than 15 centimetres that would not be subject to an export tariff. Russia has said that birch paper wood will be exempt from tariffs until 2011. The trouble is, that it has not been separated from other types of wood.
“That is why in practice tariffs have been paid on birch as wellâ€, V?yrynen said.
He added that it might be possible to implement an “end use certification†declared by the buyer or seller, or both of them jointly, giving assurances that the birch logs would be used in Finland for the processing of wood pulp.
Finland’s second proposal is that Russia should freeze its tariffs on coniferous wood at the present level.
Public statements made by Russian representatives during the whole wood tariff debate have not changed. Russia has adhered to its right to impose export tariffs.
V?yrynen admits that with respect to coniferous wood, Russia has constantly held on to its intention to “collect fairly substantial tariffsâ€.
“However, with respect to birch and aspen, they have had a more flexible attitude.â€
Nabiullina has also taken up the planned gas pipeline that is to run at the bottom of the Baltic Sea.
“I said that for Finland, this is primarily an environmental issue. I do not see any reason why this matter should not be dealt with by Finnish officials in a reasonable amount of timeâ€, V?yrynen said.
“Some kinds of rumours are circulating that Finland would try to slow this matter down, but this is not the caseâ€, he added.
Tags: assurances, cubic metre, disappointments, economic development, elvira, factories, fateful moments, forest companies, intention, public statements, pulp and paper, pulp and paper industry, quantities, raw timber, russian government, russian representatives, tariff, tariffs, ubs, wood pulp, world trade organisation