EU threatens Russia with WTO livestock case

EU threatens Russia with WTO livestock case

- Russia restricting live animal imports from EU. - EU has been trying to negotiate settlement. - U.S. set to increase trade with Russ

THE top European Union trade official made it clear to Russia Dec. 5 that it could wind up before a World Trade Organization dispute panel if it continues to restrict imports of livestock, particularly slaughter hogs, from Western Europe.

Speaking to a parliamentary political group in Brussels, Belgium, European Trade Commissioner Karel De Gucht complained that Russia is not meeting the WTO obligations it agreed to over 19 years of accession negotiations. Russia started its WTO membership drive in 1993 but joined only this August, making promises to cut subsidies and tariffs and abide by the WTO sanitary/phytosanitary measures agreement.

"Joining WTO is not just the end of a negotiation; it is the beginning of a process of reform," De Gucht said, noting that Russia now takes a significant 10% of the EU's agricultural exports.

"Signing an agreement on paper is very different from putting it into practice. Russia made many specific commitments to its fellow WTO members as part of that agreement. It now has to abide by the whole complex body of WTO law -- like all other WTO members," he added.

The blunt EU warning came as the Obama Administration gears up to increase trade with Russia.

Stressing the need to meet WTO promises, U.S. Trade Representative Ron Kirk pressed Russian First Deputy Prime Minister Igor Shuvalov on Nov. 28 for Russia to keep its market open to imports of U.S. agricultural products.

The Senate voted last Thursday on legislation establishing permanent normal trade relations (PNTR) with Russia, a vote that Senate Finance Committee chair Max Baucus (D., Mont.) called "no small matter."

Baucus and American Farm Bureau Federation president Bob Stallman agreed that the U.S. should be able to boost exports of U.S. beef and other livestock products to Russia.

"With this potential for expanding meat exports, obtaining PNTR with Russia is even more important," Stallman said late last month. "Russia's membership in WTO will provide significant commercial opportunities for U.S. agriculture."

U.S. agriculture undersecretary Michael Scuse led a trade mission to Russia last week with 23 American agricultural companies and officials from Idaho, Missouri, North Dakota, Oklahoma and Kansas.

The U.S. Department of Agriculture forecasted late last month that agricultural exports to Russia will rise to $1.5 billion this fiscal year before climbing to $1.8 billion in 2013 (Table). Still, Russia represents a relatively minor market for U.S. farms.

De Gucht said last Wednesday Russia needs to "embrace the spirit of open, competitive markets as well as the letter of WTO law" in order to get over its "dependence on the roulette wheel of global commodity prices."

He complained that Russia is "not even" meeting its WTO promises in four areas: restrictions on livestock imported from Europe, fees for recycling cars, the country's decision to unilaterally raise import tariffs on hundreds of products and a deal on EU wood exports.

"The import ban on live animals from Europe is a clear-cut breach, in our mind. The regulatory measure is designed to protect Russian producers, not consumers. The ban on live animals is highly disproportionate to the risks it claims to address," De Gucht said. "While Russia often criticizes others for overly stringent food safety legislation, this ban is the only one of its kind in existence anywhere in the world.

"The ban on slaughter pigs is even more so -- resting on small irregularities and lacking any valid scientific basis," he added.

De Gucht said the EU has been trying for months to find a negotiated settlement, the preferred, "quickest and most cost-effective" solution.

He told Russia that Europe's patience with its ban on livestock imports is limited.

"Every day we do not have a solution is a day our companies lose money, putting jobs at risk for European people at a time when we absolutely cannot afford to lose them. So, the European Union will not wait forever to reach an agreement, and the clock is ticking," De Gucht said.

If negotiations do not prove successful, the EU said it is willing to go to WTO.

"We are most certainly prepared to use all the legal avenues at our disposal, and since Russia's accession, that includes dispute settlement at WTO," De Gucht concluded.

 

U.S. agricultural exports to Russia, billion $

 

-Fiscal year-

2013

 

2009

2010

2011

2012

forecast

Russia

1.418

1.035

1.361

1.504

1.8

Source: U.S. Department of Agriculture, "Outlook for U.S. Agricultural Trade," Nov. 30, 2012.

 

Volume:84 Issue:51

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