Russia Conducts Trade Warfare on Multiple Fronts

Publication: Eurasia Daily Monitor Volume: 10 Issue: 184

Dairy case in a supermarket in Kaliningrad (Source: RIA Novosti)

Russia’s trade restrictions against Lithuania (ban on Lithuanian dairy products since October 7, threats to ban meat and fish products, harassment of Lithuanian road transport at the Russian border—see EDM, October 11) constitute but one front of Moscow’s ongoing trade warfare targeting several European countries simultaneously.

Moscow’s current measures are arbitrary, highly selective, unpredictable and intermittent, resembling guerrilla warfare in the sphere of international trade. Seldom intended to be long term, Russia’s hostile restrictions on trade are often negotiable, attempting to squeeze some concessions from the targeted countries in return for lifting the restrictions. These measures also achieve time-limited gains for Russian protectionist interests, at European partners’ cost.

In February of this year, Moscow temporarily banned frozen meat imports from Germany, as well as meat and dairy products from three German Laender (states). In March, Russia banned frozen meat imports from the Netherlands (Kommersant, October 14).

The latest trade restrictions against the Netherlands seem to be designed for political retribution, in view of their timing. On October 9, Moscow announced that some Dutch dairy products being delivered to Russia do not meet Russian quality standards and that some expensive types of Dutch flowers, including tulips, are unsafe, posing bacterial contamination risks to Russians. The Veterinary and Phytosanitary Inspectorate (Rosselkhoznadzor) chief, Sergei Dankwert, warned that Russia might restrict Dutch dairy and flower imports (RIA Novosti, October 9; Vedomosti, October 10; Kommersant, October 11). Considering the gulf between Dutch and Russian standards on these products, of which the Netherlands is a world champion, Moscow’s complaints sound far-fetched.

Two political incidents apparently triggered these warnings of asymmetrical retaliation. On September 18, the Arctic Sunrise vessel under the Netherlands flag had attempted to land several Greenpeace environmental activists on the Prirazlomnoye offshore oil-drilling rig in Russia’s White Sea. The Russian authorities arrested the would-be intruders and charged them with “piracy.” The Netherlands complained to the International Tribunal for the Law of the Sea, alleging that Russia had violated that law in this incident. Then on October 6, Dutch police briefly detained a Russian diplomat and his wife, following a drunk-driving accident and a report of domestic violence (Moscow demanded and The Hague delivered an apology for breach of diplomatic immunity) (Nezavisimaya Gazeta, October 9; Vedomosti, Rossiyskaya Gazeta, October 10). At least the second incident seems resolved, but Rosselkhoznadzor has seized the occasion to demand negotiations over dairy and tulips; otherwise, Moscow “cannot guarantee that it would not have to bar the import of some products” (Interfax, October 10, 13).

Russia’s trade restrictions against some of its neighbors—including European Union member countries and countries aspiring to EU association—bear a distinctly punitive character. These measures attempt to disrupt the decisive phase of the aspirant countries’ association process at the upcoming summit in Lithuania.

In August, Moscow imposed a week-long blockade of Ukraine’s exports to Russia. It characterized this explicitly as a foretaste of trade reprisals to follow in the event that Ukraine concludes the association and free-trade agreements with the European Union. In September, Russia banned Ukrainian confectionery exports, targeting the market leader Roshen company, whose owner Petro Poroshenko is an influential supporter of Ukraine’s association with the EU (see EDM, August 15, September 3). On September 20, Russia’s Consumer Protection and Sanitary Inspectorate (Rospotrebnadzor) chief, Gennady Onishchenko, aired complaints about the quality and safety of Lithuanian, Polish, Ukrainian, Moldovan and Georgian products (Interfax, September 20).

On September 10, Russia banned (again) Moldovan wines. The Kremlin had first embargoed Moldovan wines in 2006, but relented partially in 2012. On October 11, 2013, Onishchenko implied that Russia might consider relaxing the ban on Moldovan wines, subject to negotiations. He announced that the ban does not apply to wines and brandy from Transnistria; these can enter Russia without restrictions, effective immediately (Interfax, October 11).

On October 8 (one day after the ban on Lithuanian dairy went into effect), Rospotrebnadzor announced new restrictions on the export of Georgian wines to Russia. As in Moldova’s case, the Kremlin had fully embargoed Georgian wines in 2006, but relented partially in the spring of 2013, in this instance as a token acknowledgment of Georgia’s regime change. In a further parallel with Moldova (see above), Rospotrebnadzor announced on October 8 that the ban does not apply to wines from Abkhazia.

Imposing the new restrictions, Moscow professes “extreme concern” about the Richard Lugar Center for Public Health Research, an epidemiological laboratory near Tbilisi, donated by the United States in 2011 under a program that then-senator Lugar had promoted. Onishchenko claims (not for the first time) that the laboratory could “secretly” be used for contaminating Russia. He had claimed already in July that Georgia was spreading animal viruses into Russia’s North Caucasus (Interfax, October 8, 9; RIA Novosti, October 14). Clearly, Onishchenko does not always expect his claims to be taken seriously. His customary hyperbole (e.g., Georgia “desecrates the sanctity of grapes by making wine from them”) is simply designed to show that Russia can act as it sees fit, without international accountability.

Despite its admission to the World Trade Organization—or perhaps because of its premature admission—Russia is abusing the rules of international trade for political reasons with seeming impunity. According to Russia’s business-oriented newspaper Vedomosti (October 10), “Rospotrebnadzor and Rosselkhoznadzor have completely undermined confidence in themselves.” fThey, however, are merely fronting for the Kremlin.