What we are concerned about

The EU industry has been deeply concerned about significant increases in the volumes of Russian birch plywood being exported at extremely low prices into the EU. While to some extent the Russian industry benefits from the country’s vast birch forests, it also benefits from significant government intervention (including a ban on birch log exports in the first half of 2018, which continued to impact log prices in Russia through 2020), government supports of plywood factory expansion and lax enforcement of logging practices. All these practices have enabled Russian producers to significantly expand production capacity and to sell birch plywood into the EU at pricing levels aimed to capture market share irrespective of the cost of production.

Import volumes of Russian birch plywood increased by 37% and the market share of such imports in the Union market rose by 20% between 2017 and 2020.

Source: Chart based on data provided in the Commission Implementing Regulation (EU) 2021/940 of 10 June 2021 imposing a provisional anti-dumping duty on imports of birch plywood originating in Russia, para. 89.

Between 2019 and 2021, the Russian plywood industry launched capacity expansion projects worth about 71.4 billion roubles (EUR 2 billion) which aim to raise yearly output by 2 million m3 – a 50% increase on its current capacity of 5.2 million m3. Most of the increased production will end up in the profitable European market. Russia’s market share will only increase while the European plywood sector withers away unless adequate action is taken.

Russian practices clearly distort any level playing field for our industry and disrupt fair trade conditions on the EU’s own internal market. Therefore, we asked the EU to investigate the facts in the hope that they would remedy the situation by using trade defence instruments that would then protect our industry from the “dumping” of competing products. The European Commission, in its preliminary findings, confirmed the unfair practices.

In the absence of counter-measures, known as “anti-dumping duties”, it is feared that the European Union birch plywood industry will go out of business, with the resultant loss of employment and investment particularly in rural areas. A number of companies have already folded as a direct consequence of unfair trade practices. The expansion plans of the Russian plywood sector underline the urgency of the situation. For our industry, it is now absolutely critical and essential that the European Commission continue to act swiftly to address the issue of dumped imports of birch plywood from Russia by imposing higher import duties on Russian products for long enough to allow our industry to recover. The short EU film below explains how EU trade defence instruments might work to help us.

Trade defence instruments

The EU’s commitment to free flowing international trade depends on a level playing field between domestic and foreign producers based on genuine competitive advantages. The European Commission’s role in achieving open and fair trade includes by applying trade defence instruments, in compliance with EU law and WTO rules, defends European production against practices that distort free and fair competition, such as government subsidisation or producers selling at below market prices to force others out of business and thus capture market share or even monopolistic positions.

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