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EU 'to Turn to WTO' over Russia's Foods Import Ban

Business | August 7, 2014, Thursday // 15:04| Views: 1790 | Comments: 9
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Bulgaria: EU 'to Turn to WTO' over Russia's Foods Import Ban The ban initiated by Russian President Vladimir Putin comes after the EU approved new sactions against individuals and entities, but also against entire sectors of the Russian economy. Photo by EPA/BGNES

The European Union is to refer Moscow's decision to restrict imports of food from the bloc to the World Trade Organization (WTO), a diplomatic source reveals.

Russia imposed earlier on Thursday a one-year ban comprising agricultural products coming from the EU, US, Australia, Norway and Canada, in what has been described as retaliation after a fresh round of Western sanctions targeting key sectors of the Russian economy.

"The politically motivated large-scale trade bans are a direct violation of the norms of the WTO which the Russian Federation is obliged to observe," Lithuanian Foreign Minister Linas Linkevicius told ITAR-TASS agency.

He explained the European Commission would first analyze the ban introduced by Russia and will then take a final decision.

A source from the Economic Development Ministry in Moscow was quoted as saying that Russia was basing its argument on Article 21 of the General Agreement on Tariffs and Trade (GATT), the document that led to the creation of the WTO.

The text says that a country retains the right to impose such measures if its national security is in jeopardy.

Authorities say the period of one year could be further extended.

A list of banned products has already been published.

Estimates of Russian news agency RIA suggest the move could result in up to EUR 12 B in losses for the EU.

Experts warn that consumers from Russia could also suffer, though President Vladimir Putin has downplayed such a scenario in the decree which introduced the ban.

The business outlet RBC Daily, however, reports Moscow is planning to use Latin American countries, with some of which it maintains thriving relations, as a substitute to Western exports. Russian officials are due to meet the ambassadors of Chile, Brazil, Argentine, and Ecuador to discuss the proposal.

The EU sold EUR 11.8 B worth of food products to Russia in 2013, with the country ranking second among the bloc's food export destinations, according to Eurostat Data.

Bulgaria, an EU member which exports wine, dairy and meat products to Russia (the country's ninth-largest export partner), is likely to be affected by the Kremlin's measures.

Dimitar Zorov, a member of the Bulgarian Association of Dairy Processors, warned after Moscow's announcement that the ban will have negative repercussions on Bulgaria.

"We are exporting dairy products to Russia. Despite the huge difficulties over the past 20 years that were related to political and not economical decisions, and also despite the fact that trade balance with Russia in dairy products is on the rise every year, a political decision is being taken that will impact negatively our economy," BGNES wire service quoted Zorov as saying.

Moscow, on the other hand, has long warned it would seek to boost its agricultural output, with President Putin arguing over the past years the country should become "the world's biggest food producer".

Prime Minister Dmitry Medvedev explained on Wednesday experts should now explore ways to improve farming and prevent price rises, according to the BBC.

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Tags: Linas Linkevicius, Bulgaria, sanctions, European Commission, US, EU, Norway, canada, Australia, WTO, ban, imports, food, Russia, Vladimir Putin, Dmitry Medvedev, Dimitar Zorov, Bulgarian Association of Dairy Processors
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» To the forumComments (9)
#9
Warfou - 9 Aug 2014 // 01:28:46

@Optimistic
@Warfou2

The both sanctions, western and Russian, will hit mainly Russian consumers, not the Europeans. Only middle-eastern EU countries like Baltics, Poland etc. will feel it somehow, but not very strong. In case of Poland, the total export of foodstuffs to Russia is about USD 2 Billions p.a., being less than 1% of its exports in total. The western EU will not even notice them at all. There is no fear of recession in Europe due to these countermeasures but you can't say the same about Russia which already is in recession accompanied by a high inflation, in economic sense: a "dangerous mixture". What regards oil and gas, yes, Russia can switch them of in winter or rise the price, but if it does so, it risks loosing EU markets forever. There are also alternatives like coal, electricity and firewood which can be used for heating, most houses here can easily switch between them.

#8
Warfou2 - 9 Aug 2014 // 00:03:22

I'm sorry Gaucho.Seedy but pensioners in any Russian region (or countries around) are much better of then pensioners in Bulgaria, Romania and much more.
Do you know the amount of Americans living on food stamps?

#7
Gaucho - 8 Aug 2014 // 23:06:55

LOL Optimistic. Russia has put Lithuania into recession. Hahahaahahahaha. Lithuania's economy is smaller than the city of El Paso, Texas (the 5th largest city in the state). And Italy? A country that's been in recession for the past 20 years also? Hahahahaahahahahahaa.

If that's as bad as Russia can do then wait until your economy collapses after the new round of sanctions are implemented.

You and the Ukrainians can charge whatever you want, nobody in the West gives a rat's ass about your peasant fights and peasant wars. If you two nations manage to destroy each other the whole world will thank you profoundly.

Take Crimea too and take Belarus too while you're at it. Look at what you've done in Abkhazia and South Ossetia after having them for 6 years. They have never been poorer or more backward. Crimea will be the same but I don't give a rat's stinking ass about the peasants there and nobody in the West does either. You see Optimistic, for us Westerners your peasant region would be better if it didn't exist in the map.

#6
Optimistic - 8 Aug 2014 // 22:38:17

To Gaucho Russia is kicking ass, you say it is a small economy however the Russian sanctions will put Lithuania into recession, it will continue the recession in Italy and could cause Poland to go into recession.

The future is bright with higher gas prices to the Ukraine this winter, either the Kiev scum pay or they freeze.

And Russias reward for being peaceful and democratic is the Crimea worth about 89 billion Euros.

Long live the Russian Federation.

#5
George Zhelyazkov - 8 Aug 2014 // 22:30:45

Sa-sha,

I had the privilege to eat the Uzbek watermelons when I visited there a few years back. The Fergana Valley has indeed some of the best fruits in the world. I always tell the Canadian brutes around me that if they had some Uzbek fruits and vegetables for a week they would be out protesting against the GM plastic crap they are so used to eating. If Russia can match the Uzbek watermelons then I'm moving there in heart beat :)

Yane,

Looks like you haven't been to either India or Pakistan lately. They are both emerging markets with booming food industries. Sure, they may not match EU or North American in sanitary conditions and what you say about being a bit dirty is true but let's face that Europeans and especially North Americans have become very much spoiled when it comes to food and that is why you see so many food allergies like to peanuts and other stupid things of the sort. I went to India two years ago and saw people doing No. 2 in the fields where they grew spinach. Then the idiot guide that was taking me around gets some of that same spinach and starts munching on it and then offers me some. I can tell you that the good thing is that the Russians will be eating real organic spinach.

#4
Yane - 8 Aug 2014 // 19:34:43

George, Pakistan, are you joking? Where they hound Christians with impunity? Where the Taliban exist? As for India, fer chrissakes even 3rd world people who visit India are appalled and proclaim "God damn! This place is filthy!"...A piece of advice, never eat food in India that has meat in it, NEVER, trust me on this if you value your stomach.

To Warfou, all processing facilities are dirty, even in the EU, even if they seem clean (compared to 3rd world countries), but NEVER count out human laziness. If you don't believe me, you live in la la land if you think all or even most employees follow most rules... Clean as a laboratory? I know after a month there you wouldn't think so. First impressions are meh...Very few people actually put in the extra effort to try to abide by ALL rules for cleanliness...

Latin America it seems will be winning on these sanctions,
http://rt.com/business/178664-latin-america-benefits-russia-ban/

#3
sa-sha - 8 Aug 2014 // 13:07:46

Nice portion of the ironical sarcasm, George...;-)...../Btw, not Uzbek but Astrakhan(Russia) watermelons are the best/. And there is no ban on French wines.....A glass of French wine with a KFC (Kongo Fried Cricket)! Bans work
wonders sometimes ;-)

#2
Warfou - 8 Aug 2014 // 11:37:37

Sir, have you ever been to India and Pakistan and seen their "clean, high quality food products"? Surely, not. I wonder you know that they still "bury" their dead ones (humans!) by throwing them into the Ganges whereas their poor drink water from it? I saw it with my eyes. Have you ever been to Egypt or Congo and seen how they sell bread - thrown directly from the bakery into dirt in front of it?

The EU have the world's highest standards in hygiene and quality of food processing. I used to visit a "Mlekovita" dairy factory which exports, i.a., to Russia and Bulgaria. It looks like a laboratory with employees using disposable garments, glasses and masks changed every day to ensure full safety of the products. The other EU food processing facilities are alike.

#1
George Zhelyazkov - 8 Aug 2014 // 00:31:43

You see Bulgarians, this is what sanctions lead to. Now the EU can't sell it's Serrano Ham, French Wine, English strawberries and Norwegian salmon to Russia. Japan can't sell its Kobe beef to the Russians and Australian and New Zealand lamb is out too. Naturally American chicken and beef and Canadian wheat are also out.

When you play with fire you get burned Western decadent world. You see, I've been saying in this forum for decades that the growth is in emerging markets. In 2007 I said that in 5 years everybody would be speaking either Mandarin Chinese or Russian. Ok, I got that one wrong, but still, I see many more Chinese restaurants even in my hometown of Stara Zagora. In Hamilton there are a couple of Indians, two Gooks and one black guy who says is from France but I'm sure he's really from Congo, and I don't hear English any longer when I'm around those people.

Sanctions don't lead to anything. Now Russians will have the privilege to import the cleanest and tastiest and most high quality items from India, Pakistan, Congo, Honduras and of course Uzbekistan. In one year when Russian consumers - the world's most important - realise how tasty the watermelons from Uzbekistan and how clean the beef and chicken from Pakistan and Congo are, the tide will turn and like I've been saying all emerging markets will trade with each other and nobody will bother with the decadent West.

Get your head out of your asses Bulgarians and start companies in Pakistan so that you can sell again to our brothers and guiders in Russia. We can't accept this. Let's get moving.