Russia to hike up wood export duties

Currently Finnish forest industry imports about one fifth of its raw wood from Russia, but Russia plans to more than double wood export duties. Prime Minister Matti Vanhanen (Centre Party) has expressed his worry that the increase will put an end to wood imports from Russia. Karelian timber companies, which export a lot of wood to Finland, concur.

The government didn't pursue the matter in a EU meeting on the agenda of the upcoming EU-Russia summit. Foreign Minister Ilkka Kanerva's (National Coalition Party) explanation, that "the problem was already well known by all sides", is strange. Known problems need solutions, too. Opposition leader Eero Heinäluoma of the Social Democratic Party, for his part, called for bipartisan talks. Apparently no one has faith in the EU's ability to help.

The official reason for the increase is that the Russian authorities want to encourage wood processing inside Russia. A competing theory - I'd credit the author but I forgot where I read it - is that the idea is to temporarily stop exports, so that the price of forests plummets and land ends up in the hands of the right people at a discount. Once the sales have been made at a cut-rate price, export duties will be lowered to normal and exports will commence again.

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