Russian trade comes in from the cold
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Russian trade comes in from the cold

Russia put the last of the Cold War animosities behind it when in one week it joined a new Nato-Russia cooperation council and a day later was recognized by the European Union as an important trade partner and as a market economy.

A row has been smouldering between the trade partners over the past two years. European producers have been hurt by cheap Russian imports, especially of steel, and lobbied their governments for protective import duty hikes under anti-dumping laws. Russia is currently facing about 120 anti-dumping cases worldwide.

Strictly speaking dumping products in another market means that the producer is selling at below production cost. But the Russian producers are all making healthy profits. European and US producers argue that Russia's producers are benefiting from artificially low costs; for example, electricity tariffs are at half western levels.

Even if Russia increases energy tariffs to international levels, thanks to the country's huge natural resources it will always be able to undercut expensive western European producers. The EU has made a political decision to support Russian president Vladimir Putin's efforts to build closer ties with Europe and accept Russia as a partner rather than a competitive protagonist.

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