Russia threatens to end US meat import preferences

18 Aug, 2006

Moscow threatened on Thursday to cut trade preferences on US meat imports if a deal with Washington to let Russia join the World Trade Organisation was not struck by October.
"Russia will be forced to return to the positions that it held before agreements were reached on the trade of meat," the economic development and trade ministry said in a statement.
Russia is the largest single importer of US poultry, bringing in some 742,390 metric tons of broiler meat from the United States in 2005, the US department of agriculture said.
Import terms for US agricultural products, particularly meat, are one of the key issues holding up a bilateral agreement with Washington that would allow Russia to join the World Trade Organisation (WTO).
The United States is one of the a handful of countries holding up Russia's accession to the 149-member world trade body. When a flurry of WTO talks last month failed to produce a deal, Gref cited Russian concerns over sanitary conditions at US pork and beef processing plants as a sticking point.
The preferences Russia is threatening to remove are so-called tariff rate quotas (TRQs) set last year by the Russian government that govern the maximum amount of meat that Russia will import from the United States.
The TRQs increased US beef quotas over the next four years from 17,900 tonnes in 2006 to 18,500 in 2009 and poultry quotas from 841,300 tonnes in 2006 to 931,500 in 2009, according to US department of agriculture data.
Russia set these quotas expecting a quick end to WTO negotiations, but will cancel them if the two sides cannot agree by October, Thursday's ministry statement said.
"Under these conditions, the government can hardly continue to refuse Russian farmers' demands to revisit meat quotas" granting preferences to US producers, it added.
Agriculture Minister Alexei Gordeyev said he supported the statement.
"What's more, we have a proposal for hardening our negotiating position regarding agricultural questions and trade," Interfax news agency quoted him as saying.
Agricultural issues seem to be one of the last stumbling blocks in Russia-US talks on the WTO, after Russian officials hailed breakthroughs last month on granting US insurers access to the Russian market and strengthening intellectual property rights protection.
US President George W. Bush and Russian President Vladimir Putin agreed at last month's G8 summit on a target date of October for a final agreement. Russian officials are set to inspect US meat processing plants in the intervening months.
Asked about Gref's implicit ultimatum, Andrew Somers, president of the American Chamber of Commerce in Russia, said: "The statement probably reflects frustration from both sides."
"There is frustration certainly on the Russian side, but an equal amount on the US side, which happens when parties get very close but can't nail it down," he added.
Somers however expressed optimism that the United States and Russia would come to an agreement on WTO by October.

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