#8
Asia Times
March 14, 2002
Moscow shows steel resolve over 'Bush legs'
By Sergei Blagov

MOSCOW - It is not exactly war, hot or cold, but Russia and the US are trying to talk their way around a standoff where the Americans are hitting the Russians with steel and the Russians are replying with chicken legs.

Upset over the US decision to impose tariffs up to 30 percent on steel imports from Russia and other countries, the Russian Agriculture Ministry stopped issuing import licenses for US poultry on March 1. Imports were banned from March 10.

Russian authorities did not connect their move to the steel tariffs publicly. Health Minister Yuri Shevchenko declared that US poultry had an unacceptably high level of antibiotics. But there are few doubts that the poultry ban has more to do with the US tariffs on steel imports than with antibiotics in chickens.

The Russian ban matches the US tariffs in value if not in kind. Russian officials say the US tariffs could cost Russian steel producers more than US$1 billion a year, and lead to massive layoffs in the steel sector that employs 750,000 people. The Russian ban could cost US chicken farmers up to $700 million a year. Russia imported about 1.3 million tonnes of poultry last year, with more than a million tonnes coming from the United States.

US agriculture and trade officials met on Monday and Tuesday with their Russian counterparts in Moscow to press for an end to the ban. Russian officials took the line that the ban reflects their concerns about sanitary conditions, the use of antibiotics, and feed additives. US officials said the objections are scientifically unjustified and accused Moscow of protectionism.

Agriculture Minister Alexei Gordeyev sought to underline the seriousness of the Russian government's stated position. He said that the total ban on American chicken could be lifted eventually but US poultry with certain categories of antibiotics would remain barred from the Russian market.

Members of parliament made strong statements against the imports from the US. "A lot of trash is being imported into Russia" and the country is being turned into a "dumping ground", State Duma deputy Vyacheslav Volodin said on Tuesday. The influential mayor of Moscow, Yuri Luzhkov, supported the ban. Meat with antibiotics and feed additives is no good for consumers, he told TV3 channel. He suggested that this was the reason behind so many overweight people in the US.

Some Russian government officials have also voiced concern over the country's heavy reliance on imports. Gordeyev said this level of reliance on food imports was a national security issue. Russia imports 20 percent of the meat consumed in the country; in the major cities the figure is about 80 percent, Gordeyev told a conference on food security convened in Moscow on Tuesday.

Local farmers were quick to step in to take advantage of the ban. The same day, Tuesday, a group of businessmen, local governors, and parliament deputies created a union to lobby the government on behalf of the country's farmers and the food industry. The farmers' group, the Russian Agrarian Food Union, claims to represent about 40 million people in the agriculture sector. It came as no surprise that the group's first move was to support the Agriculture Ministry's decision to ban import of US poultry.

But the Russian ban on inexpensive US poultry could also hit the Russian poor. According to market research, about 60 percent of Russians regularly buy chicken, or what they call "Bush legs". The vast majority of consumers are low-income people who need these Bush legs. The price of Russian poultry is 30 percent higher than the imports from the US.

Despite the high level of imports, Gordeyev announced Tuesday that there will be no poultry shortages in Russia after the ban. He said also that the ban would remain in force at least 60 days.

US trade officials have reportedly hinted that failure to scrap the ban would hurt Russia's chances of getting access to reduced US import tariff levels, and undermine Russia's World Trade Organization (WTO) bid. Both sides, however, played down talk of a trade war, officially denying any link between the two issues.

The chicken-for-steel dispute is raising new questions about Russia joining the WTO. Guennady Zyuganov, leader of Russia's Communist Party, said on Monday that joining the WTO would hit the country's agricultural and industrial sectors. At least 20 million Russians could lose their jobs, Zyuganov told parliamentary hearings on the WTO. (Inter Press Service)

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