01:10 GMT27 January 2021
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    MOSCOW (Sputnik) - Russia's victory in a World Trade Organisation (WTO) lawsuit against Ukraine on "energy corrections" increases Moscow’s chances of successfully challenging European anti-dumping measures, the Russian Economic Development Ministry said.

    "The outcome of the dispute is Russia's victory in terms of not only a possible liberalisation of Ukraine’s measure (the elimination of violations should lead to a decrease in the size of anti-dumping duties), but also of contesting measures of the European Union, which uses the method of 'energy corrections' in anti-dumping investigations regarding Russian goods", the ministry said.

    The statement comes after the WTO secretariat on 12 September distributed a report of the Appellate Body on the outcome of the Russia-Ukraine dispute over anti-dumping measures for ammonium nitrate of Russian origin (DS493), in which it confirmed Russia's victory. Russia disputed the so-called “energy correction” method, which is used to calculate the cost of Russian products when instead of Russian market energy prices, prices on the markets of third countries are used.

    Ukraine's anti-Russia rhetoric - adopted in recent years amid tensions over Crimea, the self-proclaimed Donetsk and Lugansk People's Republics, and the 2014 Ukrainian revolution which ended in the controversial ousting of elected President Viktor Yanukovych and the overthrow of the Ukrainian government - has resulted in a drastic reduction of trade between the neighbouring states.

    Russia-Ukraine Trade & Transit Disputes

    According to Ukraine's Federation of Employers, an organisation looking out for the interests of business and industry, the tariff wars reduced Russian-Ukrainian trade by more than three times between 2013 and 2018 and have cost Ukraine 10 percent of its gross domestic product (GDP).

    In 2014, Ukraine tripled import duties on Russian ammonium nitrate from about 12 percent to about 36 percent, citing gas price discrepancies between domestic chemical plants and Russian manufacturers as the reason for its decision. In May 2015, Russia initiated a case against Ukraine in the WTO. Moscow's main complaint was that Kiev had used an unfair method of energy adjustment, underestimating the domestic price of gas that Russian companies purchase for the production of ammonium nitrate.

    Ammonium nitrate is used in agriculture as a fertiliser and in mining as an explosive component.

    Following the duties, Russia and Ukraine became embroiled in transit disputes in January 2016, when Moscow imposed restrictions on the transit of Ukrainian goods to Kazakhstan and Kyrgyzstan through its territory in response to the establishment of a free trade zone between Ukraine and the European Union. The transit is subject to tough monitoring, including via the Russian-developed space-based satellite navigation system GLONASS.

    Responding to these measures, in September 2016, Kiev sent a request to the WTO for consultations with Moscow. A year later, Ukraine filed a lawsuit dubbed "measures concerning traffic in transit" against Russia. Kiev claimed that the restrictions were in violation of WTO rules and caused economic damage to the state.

    On 5 April this year, the Russian Ministry of Economic Development said that Russia had won the dispute with Ukraine in the WTO over the transit of goods from Ukraine via Russia.

    bilateral relations, trade, tariffs, World Trade Organization (WTO), Ukraine, Russia
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