EU takes on Russia at WTO over car recycling fee

The European Union launched a trade dispute with Russia on Tuesday over a car recycling law.

The complaint, launched at the World Trade Organization, claims that Russia is protecting its domestic carmakers by charging a recycling fee on imported cars.

The EU said that it had complained to Russia repeatedly before making an official dispute under WTO auspices. It had given Russia a July 1 deadline.

Russia was accepted as a member of the WTO less than a year ago. European nations complain that the fee breaks the most basic rules of free trade promote by the Geneva-based trade organization.

"The European Commission has pursued every diplomatic channel for almost one year now to find a solution with our Russian partners on this matter but to no avail," EU Trade Commissioner Karel De Gucht said in a statement.

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"The fee is incompatible with the WTO's most basic rule prohibiting discrimination against and among imports."

The fee is said to cut European automobile exports to Russia by seven percent despite the growing Russian market for cars.

Russia is currently debating a bill that would see the fee charged to all carmakers but it is still lingering in the parliament.

Russia joined the WTO last year after 18 months of negotiations. Car import tariffs were a sticking point in the accession.

However, one important question still lingers: Russia makes cars?