Publication: Monitor Volume: 8 Issue: 82

Some 30,000 tons of U.S. poultry products have apparently been cleared for export to Russia, reports said yesterday, but the resumption of trade in this area does not appear to mark a full resolution of the high-profile chicken dispute that has raged between Russia and the United States over the past six weeks. The dispute began on March 10, when Russian authorities imposed a complete ban on U.S. poultry imports in what many observers saw as retaliation for a U.S. move to limit the entry of Russian steel into the United States. The so-called “chicken war” zoomed to the top of the Russian-U.S. diplomatic agenda, in large part due to the fact that the poultry exports bring U.S. producers some US$700 million in revenues annually and actually constitute America’s largest export to Russia.

A protocol signed by the two sides on March 31 appeared to resolve matters, but amid Russian complaints that the U.S. side had failed to live up to conditions contained in the agreement (complaints that Washington rejected), Moscow first delayed the lifting of the ban and then erected new obstacles to a full resumption of trade. They included a continued ban on poultry products from four U.S. states–North Carolina, Maine, Virginia and Pennsylvania–as well as from fourteen plants said earlier this spring to have shipped salmonella-tainted chicken to Russia. Those moves would reportedly affect between 20 and 25 percent of all U.S. poultry exports to Russia. More important, however, is that Russia’s Agricultural Ministry canceled all existing permits for Russian poultry exporters and required them to apply for new permits under a revised system of requirements now being devised. Reports out of Russia earlier this month suggested that reissuing permits could prove to be a difficult and time-consuming process for the Russian importers involved (see the Monitor, April 16).

Yesterday’s developments occurred against this background. According to reports out of Moscow, Russian Agricultural Minister Aleksei Gordeev indicated that a handful of Russian import companies had received the new permits, and that they had already finalized deals for the import of some 30,000 tons of poultry into Russia. In comments to the press that followed a meeting with U.S. Ambassador Alexander Vershbow, Gordeev appeared also to indicate that those companies came from a group of seventeen (some reports said fifteen) that had applied to resume imports. He did not say if or when the remaining import companies would receive permits, but did claim that the bureaucratic obstacles to resuming the imports would be kept to a minimum. The 30,000 tons approved yesterday are but a small portion of the approximately 1 million tons of poultry American producers sent to Russia last year.

However, in comments of his own published yesterday by the daily Rossiiskaya Gazeta, Vershbow offered only a partial endorsement of the new Russian poultry import plan. The U.S. envoy complained that the Russian side was moving too slowly to implement the agreements contained in the March 31 protocol, despite what he said was the full compliance of American producers. He suggested that Moscow’s actions raised questions as to whether it intends to honor the March 31 protocol in full. He also went out of his way to deny a claim that Gordeev and some other Russian agricultural officials had made earlier; namely, that Washington actually has two sets of standards for poultry produced in the United States, one for products destined to be consumed domestically and another, lower standard for those shipped abroad.

The chicken dispute, meanwhile, has become something of a political issue in Russia, where there is considerable support for efforts to protect Russia’s domestic poultry industry. In comments to the Russian State Council on April 22, for example, President Vladimir Putin felt compelled to deny the charge leveled by a Russian governor that Moscow had lost the “chicken war” with the United States. Putin denied that any such “war” had existed, and went on to argue that the issue has been resolved “in a pretty acceptable way.” He pointed to the fact that roughly 20 percent of U.S. poultry exports to Russia remain subject to the government’s ban, and said that Russian veterinary inspectors would now be stationed at U.S. ports to monitor shipments of chicken. Of perhaps greater importance, Putin also argued that a full ban on U.S. poultry products made little sense, because Russian producers were unable to meet demand and that a full ban on U.S. imports would therefore drive up chicken prices in Russia (AP, April 22-23, 25;, April 22, 24-25; Rossiiskaya Gazeta,, April 25).

But Putin appears not to have addressed issues related to the new permits, or whether they will be used to limit U.S. exports beyond the twenty percent connected with the existing partial ban. He appears also to have avoided discussion of calls from within the Agriculture Ministry–which appear to be driving Moscow’s resistance to a full resumption of the chicken trade–for the imposition sometime in the future of new import quotas on U.S. poultry products. Any move of that sort would presumably be connected to pressure for the Russian government to start offering more support to Russia’s domestic chicken producers.

Against this background, it remains unclear whether the chicken dispute will prove to be a point of agreement or discord during the upcoming Russian-U.S. summit in Moscow and St. Petersburg. Indeed, the Kremlin may be waiting to see how the summit turns out before it decides upon a definitive trade policy with respect to U.S. poultry. There is, meanwhile, some irony to the emergence of a trade row at this time over the U.S. poultry exports given that imported U.S. chicken legs were dubbed “Bush legs” when they began flooding the Russian market in the early 1990s during the presidency of George H.W. Bush. But the issue is a more serious one for U.S. poultry and meat producers, who last month saw domestic prices for chicken fall sharply and who fear that this might also drive down demand for beef and pork (Reuters, March 1).