The European Union (“EU”) has confirmed that it is considering the removal of Russia’s Most Favoured Nation (“MFN”) status at the World Trade Organisation (“WTO”) in response to the ongoing conflict in Ukraine. As a consequence, the EU would be free to increase tariffs or establish quotas on Russian imports.
MFN treatment refers to the WTO principle of equal treatment among trade partners — meaning that preferential treatment given to a trade partner by one WTO member must be extended to all others.
A spokesman for the European Commission confirmed that EU national officials met on Friday 4 March to discuss the revocation, which would be possible through the WTO national security exception. EU national officials were claimed to have shown “strong support” for preparing a statement with “like-minded countries” and with a “willingness to take appropriate trade measures as an action.” Such indications may mean other WTO members will act in unison with the EU in removing Russia’s status. The UK government, for example, is yet to announce any WTO-level action against Russia at the time of posting this update.
The spokesman also confirmed that removing recognition of Russia’s MFN status within the EU would involve the same legal process as the EU’s previous rounds of sanctions against Russia. As a consequence of using this legal route, it is likely that the EU could ban trade in goods and services with Russia, end intellectual property protection and raise tariffs.
The chair of the European Parliament’s international trade committee, Bernd Lange, commented on the matter via twitter, stating that “…a fine balance needs to be struck between punishing those responsible for aggression and upholding a rules-based trading system that is under threat.”
In the meantime, Russia was suspended on Friday from the Developed Countries Coordinating Group at the WTO, as announced by the EU and the US.