Publication: Monitor Volume: 8 Issue: 98

Russia and negotiators from the United States and NATO have managed in recent days to reach agreements on two of the key issues–strategic arms control and Russia-NATO cooperation–that threatened earlier to spoil this week’s Russian-U.S. summit talks in Moscow and St. Petersburg. But with only a few days to go until the May 23-26 meeting between Presidents George W. Bush and Vladimir Putin, one issue that continues to roil relations is the now more-than-two-month-old trade dispute over U.S. poultry exports to Russia. Indeed, in comments to reporters only a day after it was announced that Russia and the United States had reached agreement on an arms cut pact (see the Monitor, May 14), U.S. Secretary of State Colin Powell was quoted as saying that the current point of tension between the United States and Russia was not the arms race but Russian barriers to American poultry imports. “I am more worried about chickens going back and forth than missiles going back and forth.”

Although Powell’s last comment was offered facetiously, his highlighting of the poultry squabble reflects the extent to which it has become a major problem in relations between Washington and Moscow. And it is not clear if a solution can be easily or quickly found. In comments to a high-level meeting of federal and regional authorities in Kaluga over the weekend, Moscow Mayor Yury Luzhkov suggested that he would forbid the sale of “Bush legs” in the Russian capital. U.S. chicken imports were dubbed “Bush legs” when they began flooding the Russian market in the early 1990s during the presidency of George H.W. Bush. Luzhkov’s remarks came at a meeting devoted to promoting and strengthening the “security” of domestic agricultural producers in Russia, and reflected increasingly loud calls for Russia to promote greater agricultural self-sufficiency by protecting itself against foreign food producers.

The Russia-U.S. chicken dispute began in March of this year when Russian authorities imposed a complete ban on U.S. poultry imports in what many observers saw as retaliation for a move by the Bush administration to limit the entry of Russian steel into the United States. The two sides signed a protocol on March 31 that appeared to resolve the matter, but Moscow first delayed lifting the ban and then erected a series of new obstacles, including a ban on poultry products from North Carolina, Maine, Virginia and Pennsylvania as well as from fourteen specific plants said to have shipped salmonella-tainted chicken to Russia. Those moves alone would reportedly have affected between 20 and 25 percent of all U.S. poultry products to Russia. More important, however, was a decision by Russia’s Agricultural Ministry to cancel all existing permits for Russian poultry exporters and to require that the importers apply for new permits under a revised system of import controls.

These new procedures seem to have been deliberately designed to choke off any quick resumption of U.S. chicken exports to Russia. A report published by the Moscow Times last week quoted Deputy Agriculture Minister Sergei Dankvert as saying that Russia’s veterinary service had issued a total of twenty imports for 75,000 metric tons of U.S. poultry. That is but a small fraction of the approximately 1 million tons that U.S. producers sent to Russia last year. Moreover, Dankvert was also quoted as saying that “companies that received permits are not in a hurry to import poultry.” His remark appeared to reflect reported fears among Russian poultry importers that they will not be able to fulfill all the new conditions set by the government and that any move to bring American chicken to Russia under these conditions would be a risky commercial venture.

According to the same report, the Russian government has managed to keep the price of chicken in Russia at a level roughly equal to the price before the ban by increasing poultry imports from Brazil and the European Union. That would seem to contradict the goal of promoting domestic Russian producers, and would suggest that at the present time at least Moscow is actually intent either on punishing the United States or diversifying its poultry supplier base. The one million tons of chicken supplied to Russia last year by U.S. producers exceeds the amount produced in Russia itself (estimated at between 550,000 and 800,000 tons), and earned U.S. poultry companies some US$700 million in revenues.

Developments in Russia would seem to bear out warnings that recent U.S. trade actions–including the bill to enact steel tariffs this past March and a more recent action to increase subsidies to American farmers–might embolden protectionist forces in other countries. In the remarks he delivered in Kaluga over the weekend, for example, Moscow’s mayor suggested that Russians (or Muscovites, at any rate) should be willing to “tighten their belts” a bit in order to promote domestic producers by foregoing foreign poultry (and pork) products. Meanwhile, the Russian government followed the U.S. lead last week by deciding to levy duties of its own on steel imports. Russia currently has low domestic demand for steel and exports about 80 percent of the steel it produces.

Whether the poultry ban will have an adverse impact on the Russian-U.S. summit–or on bilateral relations more generally–remains to be seen. Some U.S. officials have spoken in ominous terms of the possible consequences for Moscow, including a lessening of U.S. support for Russian membership in the World Trade Organization and further delays in lifting the 1974 Jackson-Vanik trade amendment. The chicken dispute, which directly touches a large Russian constituency in a way that security issues like arms control and Russia-NATO cooperation might not, appears to have become a significant political issue in Russia. What is not clear is whether the issue is big enough to discourage the Kremlin from making the sort of concessions that made the arms cut and NATO-Russia cooperation agreements possible (Moscow Times, New York Times, May 15; Strana.ru, March 18; AP, May 15-16).