Putin orders possible restrictions on Tetra Pak-like packaging from Asia to support local cos

MOSCOW. May 27 (Interfax) - President Vladimir Putin has ordered the Russian government to work out mechanisms to curb imports of analogs of Tetra Pak packaging from Asia taking into account tools offered by the World Trade Organization.

Putin issued the order at a meeting with representatives of Russian business circles after JSC Packaging Systems CEO Alexander Krivolapov asked him to consider restricting imports of Tetra Pak packaging from Asian countries, including China and India.

"One of the fairly difficult issues for us is growing competition with import suppliers, primarily from Asia. The situation here is such that we're carrying out a very intensive program for import substitution of raw materials, working with all the main suppliers, but the process takes time. And now there is a situation where duties on imported raw materials that are used regularly increase, while duties on imported products with which we compete remain at a fairly low level," Krivolapov said.

He said Russian companies are now actively launching new facilities to produce packaging for juices, baby food and so on, which will make it possible to cover the domestic market's needs "already in a couple of years." But with increasing competition from Asian Tetra Pak packaging, there is a risk that these new plants will be underused, Krivolapov said.

Putin proposed that the Economic Development Ministry consider imposing additional restrictions on imports of these goods.

Economic Development Minister Maxim Reshetnikov recalled that Russia has WTO obligations that prohibit it from imposing an import duty of more than 5% on packaging and the maximum duty is already in effect.

"We trade with China [...] We're in the WTO and they're in the WTO, so we're very careful about this. If these were supplies from Europe, we would now immediately impose duties [on imports] from unfriendly countries. It's clear that the WTO already doesn't work there in this regard. But since it is Asian countries, with whom we're increasing trade, Vladimir Vladimirovich, we need to observe WTO rules there," Reshetnikov said. As an alternative, he proposed launching an antidumping investigation into Tetra Pak packing imports.

"Within the WTO there are more delicate mechanisms that one must know how to use," Reshetnikov said.

"Well then, there are delicate mechanisms. That's what I'm talking about. You need to work with them. All the mechanisms are there," Putin responded.

He also said that WTO members are generally inclined to manipulate its mechanisms. "We'll work here with you [...] They are such big specialists, all our competitors, such masters, they manipulate all these percentages," he said.