May 22, 2007

Russian trade tactics irk Europe

Russia's heavy-handed trade tactics that have seen a ban on Polish meat imports suggest the Kremlin is trying to sow divisions between "old" and "new" EU member states.

European CommunityCommentary by Sergei Blagov in Moscow for ISN Security Watch (22/05/07)

Russia's heavy-handed trade tactics have placed it on a collision course with the EU, though Moscow appears reluctant to review its confrontational and selective policies.

On 17-18 May, the EU-Russia summit near Samara, Central Russia, failed to find a way ahead to resume negotiations on a new EU-Russia partnership agreement, blocked by Poland's veto in response to Moscow's trade restrictions.

Moscow insists that the EU is set to remain Russia's main trading partner. Russian President Vladimir Putin told the summit that trade with the EU made up 52 percent of Russia's total exports, but in an apparent reference to Poland, he lashed out at the "economic selfishness" of some EU nations.

In response, European Commission President Jose Manuel Barroso, along with German Chancellor Angela Merkel, reiterated European solidarity. "A difficulty for a member state is a difficulty for the whole European community," Barroso told a news conference after the summit, adding that if there was a reason for the ban then Polish meat would not be allowed to circulate in the EU, either.

The Kremlin has been reluctant to concede a crisis in its relations with the EU. On 15 May, Putin pledged to solve differences with the EU, including Russia's ban on Polish meat imports. "There is no conflict of interests between Russia and the EU," Putin said. The meat ban should be discussed in a "depoliticized" way, he said.

But EU top officials appear to think otherwise. In April, EU Trade Commissioner Peter Mandelson said EU-Russian ties had reached "a level of misunderstanding or even mistrust not seen since the end of the Cold War." Poland also viewed the meat ban as a politically motivated move, a perceived retaliation by Moscow for Warsaw's support of the pro-Western "Orange Revolution" in Ukraine in late 2005.

The Kremlin refuses to back down on the meat ban. Also on 15 May, Russian Agriculture Minister Aleksei Gordeyev made it clear that Moscow's position remained unchanged and that Russia would only import what he described as safe products.

Last April, during talks between Gordeyev and the EU's commissioner for health and consumer protection, Markos Kyprianou, Russia refused to lift the ban and called on the EU to ensure that Polish suppliers would not re-export meat to Russia from countries on its banned list.

In the meantime, Russia has hinted that its restrictive trade policy could be extended to embrace the entire EU. Last December, Russia threatened to halt US$2 billion/year EU meat imports on 1 January, and suggested the signing of bilateral agreements with each EU nation guaranteeing the safety of meat products. Moscow cited veterinary safety concerns about products from Bulgaria and Romania, who joined the EU on 1 January.

The EU opposed Russia's request, saying such bilateral agreements would contradict to the bloc's trade policy. Subsequently, Russia and the EU agreed that European meat imports to Russia would continue "as normal" after 1 January.

But earlier this year, Moscow renewed its threats to restrict EU exports. On 2 March, Russia’s agriculture oversight agency Rosselkhoznadzor urged each EU country to submit plans for safety monitoring in 2007 by the end of the month or face possible suspension of EU meat imports. Rosselkhoznadzor's continued insistence to deal with each EU country separately came as an indication of Russia's consistent political pattern.

Many view Russia's warnings as a Kremlin plot sow divisions between old and new EU member states.

After the summit, Barroso warned Russia against trying to create divisions within the EU. “One can get the impression that Russia views some EU members, like Poland or the Baltic states, differently from others,” Barroso told Germany’s Focus magazine. He said Moscow had to realize the interests of Poland were just as legitimate as those of France or Germany.

Despite the warning, Moscow remains reluctant to work with the bloc as a single entity.

However, while the Polish veto seems to put some psychological pressure on Moscow, it is unlikely to deal any serious blows to Russian interests. The EU and Russia signed the current Partnership and Cooperation Agreement (PCA) in 1997, and that agreement formally expires on 1 December. However, the PCA will be automatically extended on an annual basis if neither of the two sides revokes it. Neither the EU nor Russia have indicated any plans to abandon the agreement.

Subsequently, Russian officials say the Polish meat ban issue will take some time to resolve. Russia will start negotiations on a new partnership deal with the EU only after joining the World Trade Organization (WTO), Russian Economic Development and Trade Minister German Gref said on 20 May. The Russian government expects the country's formal WTO entry in early 2008.

"So for now, the Kremlin is likely to continue its controversial policy of treating new EU members, like Poland, as second-class citizens through restrictive trade policies, while the rest of the EU will have to face that tactic without allowing Moscow to sow real divisions between "old" and "new."

Sergei Blagov is a Moscow-based analyst for ISN Security Watch.

The views and opinions expressed herein are those of the author only, not the International Relations and Security Network (ISN).

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