Tags: U.S. | Meat | Spat | Russia | trade | moscow

U.S. Urged to Turn Up Heat in Meat Spat With Russia

Wednesday, 23 Dec 2009 04:49 PM

 

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American officials must step up negotiations with Russian counterparts — from the technical level to the highest diplomatic and political echelons — to lift trade barriers that threaten exports of U.S. meat to Russia, a top market.

Moscow has banned pork from all but six U.S. processing plants because of a dispute over standards for antibiotic residues — and has threatened to stop accepting U.S. chicken after Dec. 31 because of concerns about chlorine rinses.

Washington has said Russia's concerns are unwarranted and go far beyond international scientific standards used by members of the World Trade Organization.

Russia does not belong to the WTO, so is not bound by the standards. Some say the situation illustrates why the United States should help Russia complete the drawn-out process of accession.

"If we can get Russia into the rules-based system, it frankly strengthens our hand and it facilitates our ability to solve challenges like we have now," U.S. Trade Representative Ron Kirk said in an interview with Reuters.

Others grumble the perennial meat trade spats prove Russia is not serious about becoming a WTO member.

"The worst outcome would be if Russia's behavior creates a groundswell of opposition here saying that they should not be in the WTO," Kirk said.

Last year, Russia bought $801 million worth of U.S. chicken, making it the No. 1 export market, and $476 million of U.S. pork, putting it in the top five.

But trade tensions have flared regularly between the two nations since the United States began shipping large volumes of chicken and pork into Russia more than a decade ago.

Russian and American industry and technical officials have been discussing how to square differing standards since May, but have not come to definitive agreements.

On chicken, Russian officials have raised safety concerns about chlorine rinses routinely used in U.S. plants. Now, Moscow says antibiotic residues in U.S. pork have exceeded its standards — standards Washington says are unreasonable.

"Can you imagine us exporting products to the United States and declaring that we will not observe (USDA) rules? An exporting country should observe the standards of an importing country," said Sergei Dankvert, the head of the Russian animal and plant health watchdog Rosselkhoznadzor.

Russia gave ample warning to the United States about a Dec. 1 deadline for pork export certificates, said Sergei Yushin, head of the National Meat Association.

"But, lamentably, nobody came to Russia in the last two months," he said.

"We believe Russian demands are legitimate and other countries observe them, like the European Union, or Brazil," Yushin said.

The bans come as Russia moves to rebuild its domestic meat sector, whittling down imports allowed to enter at low duty rates.

Past flare-ups have led to a reduction in American exports to the Russian market, noted James Collins, former U.S. ambassador to Russia, now with the Carnegie Endowment for International Peace.

"You generally have a diplomatic back-and-forth which is, in essence, a trade negotiation, until some kind of new arrangement gets worked out," Collins said.

Blocking U.S. meat shipments helps Russia boost demand and prices for domestic farmers, traders and analysts noted. Many in the United States believe protectionism is at the root of the trade barriers.

"This is simply protectionism of surprisingly small interests," said Anders Aslund, a senior fellow at the Peterson Institute for International Economics who specializes in Russian issues.

The United States must make "a lot of noise" at higher political levels to tamp down the tension, he said.

"Whenever (Prime Minister Vladimir) Putin feels this is going too far and (that) now we want to make some headway, then we get some headway," Aslund said.

The United States has few other options but to pursue bilateral talks, given that Russia does not belong to the WTO, said David Tarr, a consultant with the World Bank.

"In the absence of a negotiated agreement, the U.S. could always retaliate, barring access to products from Russia ... but they prefer not to do so," Tarr said.

It's also unlikely that the meat trade issue would prompt the United States to pull back from helping Russia move forward on its WTO accession bid, analysts said.

Progress toward accession has stalled since June after Russia surprised the world by saying it planned to join the WTO in concert with Kazakhstan and Belarus.

That leaves the United States "having to resort to diplomacy — hard diplomacy, soft diplomacy, and every other tool" on the pork bans, said USTR Kirk, who said he had raised the matter with his Russian counterparts.

"The impact on our industry is so dramatic and so compelling, we're trying to do everything — we'll use every tool that we'll have," Kirk said.

© 2014 Thomson/Reuters. All rights reserved.

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