Activists from the Eurasian Youth Union hold a rally against the war in Iraq and a military operation in Iran in front of the U.S. embassy in Moscow
Photo: Sergey Mikheev
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Baring His Teeth – With Chicken
// Threatening to Cut Off Poultry Imports, German Gref Threatens America with an Ultimatum over WTO Accession
Russian Trade and Economic Development Minister German Gref has issued an ultimatum to the American trade representative that demands an agreement on Russia's acceptance into the WTO by December 2006. Otherwise, Russia will deprive America of the preferential status it enjoys on the export of meat products to Russia, a move that could cost American producers 40% of their poultry sales. "Drumstick blackmail" has already been used repeatedly by Russia in its dealings with the US, but it has never been successful.
Kommersant has acquired a letter written by Gref to US Trade Representative Susan Schwab and dated August 8, 2006. The letter, which discusses talks between Russia and the US concerning Russia's accession to the WTO, is friendly in tone, but it contains an ultimatum. Gref states that unless a protocol for Russia's acceptance into the WTO is signed by the US within three months, Russia will strip the United States of its preferential status in the export of all agricultural products to Russia, primarily American meat products.
It is worth remembering that the last round of talks between Moscow and Washington about the Russia's acceptance into the WTO ended in failure (see Kommersant, July 17). The official reason for the failure of the talks was a lack of agreement on veterinary standards to be set in the export of pork from America to Russia. Although Gref declared publicly, in the period leading up to the G8 summit in St. Petersburg, that a protocol between Russia and the US would soon be signed, George Bush explained to Russian President Vladimir Putin that he could not act without congressional consent. Senators were continuing to bombard him with letters insisting that Russia is unfit to be a member of the WTO not only because of its problems protecting intellectual property, but also because its internal politics do not sufficiently accord with democratic principles.
At the G8 summit, Bush and Putin confirmed a "checklist of tasks," wherein it was set that WTO negotiations should be completed no later than October 2006. It is precisely this list that is serving as the grounds for Gref's ultimatum.
In the letter obtained by Kommersant, Gref writes "I believe that the remaining problems can be made to fit within the framework defined by the rules and practices of the WTO and by the conditions of our reciprocal agreement concerning the sale of meat… I hope that this time the matter will be settled successfully. Otherwise, as Russian President Vladimir Putin said earlier, the Russian side will be obliged in October 2006 to scrap its self-imposed obligations with regard to the delivery by the US to Russia of all kinds of agricultural products."
Most importantly, Gref is threatening to abolish the agreement between the governments of the US and Russia "Concerning the Sale of Several Kinds of Poultry, Beef, and Pork Products," which was signed on June 15, 2005 (see Kommersant, May 15, 2005). This agreement will be in force until 2009 and introduces a quota increase to 1.252 million tons for the delivery of American poultry products, 450 thousand tons of beef, and 502 thousand tons of pork. What is more, according to the text of the agreement, American exporters can arrange to deliver amounts beyond the quotas if they agree to pay customs duties of 60% (duties for goods within the quota amounts are 15%). However, the agreement requires that the US be consulted in advance about veterinary restrictions imposed by the Russian Agricultural Inspection Authority.
Poultry products are the main "exemption" involved in the agreement – Russia receives around 40% of US poultry exports. According to data from the US Department of Agriculture, in 2005 Russia imported 742.39 thousand tons of broilers, 9% more than in 2004. According to Albert Davleyev, chief of Russian representation in the US Poultry and Egg Export Council, in 2006 poultry exports from the US could be worth $600 million.
The subject of "Bush's drumsticks," which first arose in the beginning of the 1990s, has been used repeatedly by Russia to politicize various negotiations with the United States, but Russia has never won significant successes with its "drumstick blackmail." Kommersant believes that, despite the Trade Ministry's declarations, Russia's proposed restrictions on the meat market will not settle America's concerns about the WTO. It is unlikely that Susan Schwab, who demonstrated striking intractability in July's talks with the Trade and Economic Development Ministry in Moscow and St. Petersburg, is ready to give the green light to Russia's acceptance into the WTO in exchange for chicken.
Aleksey Shapovalov
All the Article in Russian as of Aug. 17, 2006
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