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. Last Updated: 07/27/2016

EU Opens Grain Talks With Moscow

BRUSSELS, Belgium -- The European Union started complex talks with Russia and Ukraine on Tuesday about a new system of grain import quotas and said it was still hoping for a deal soon with the United States and Canada.

The European Commission wants the new quota system to protect the EU market from a flood of cheap grain from the two former Soviet states. But it must also negotiate with World Trade Organization partners Canada and the United States.

"Now we are facing complicated bilaterals starting today on cereal exports," EU Trade Commissioner Pascal Lamy told a European Parliament committee as he spoke in general of EU relations with Russia.

He told reporters that no quick result from the discussions could be expected. "My experience says I would be surprised if talks with our Russian friends end after a few days," he said.

Russia, which is negotiating entry into the WTO, has said the EU's plan for import quotas violates the rules of the international trade body.

Russia has also threatened tit-for-tat quotas and duties for EU meat producers.

A spokeswoman for Lamy said that during the talks with Ukraine and Russia, the EU would set out the bloc's proposed solution to the influx of cheap grain and listen to the comments from the two countries' representatives.

The negotiations on grain import quotas are being led mostly by agriculture officials at the commission.

The spokesman for Farm Commissioner Franz Fischler said no deal had yet been wrapped up with the United States and Canada.

But the spokesman repeated the comments he made last week that a solution was close.

Lamy declined to comment on whether a deal with Canada and the United States had already been reached.

The EU has to negotiate a deal with these two grain exporters as part of its WTO commitments. It is expected to try to sweeten the deal for the United States and Canada by offering them exclusive quotas.

EU officials have said the commission has proposed a tariff rate quota system, offering a hefty quota of some 5.5 million tons on various types of wheat.

The sources have said the United States and Canada would enjoy

preferential treatment and be allowed to export around 3 million tons duty-free.

The remainder of the quotas would carry a tariff of some 40 euros ($40.40) per ton and be open to any country. Imports outside the quota, as well as low-quality soft wheat, the main Ukrainian and Russian import, would have a duty of around 95 euros per ton.

Latest figures show the total amount of soft wheat imported into the 15-nation bloc, from the start of the campaign in July to Nov. 5, reached around 5.41 million tons.

The figure at the same time last year was 2.21 million tons.