Key Topic – EU Pork Access to Russia
But even with its increased presence in Asia, loss of the Russian market has still dealt a tough blow to the European pork industry and other agricultural sectors in the EU. In response, the European Commission recently announced an increase in aid to farmers, including more funding for promotion of EU pork. Some EU member states also recently renewed their call for individual negotiations with Russia as a means of resolving Russia’s African swine fever (ASF) related ban on EU pork, which has been in place since January 2014. But this approach is opposed by other EU members and the Commission, which insist that the EU must address this issue collectively. Even if relief is gained from the ASF-related ban, it would only apply to pork fat and offal. Pork muscle cut exports would still be prohibited under Russia’s food import embargo (related to the conflict in Ukraine), which was extended through June 2016 and expanded to include imports from Ukraine.
UPDATE: On Aug. 19, 2016, the WTO Dispute Settlement Panel issued its report on Russia’s ASF-related suspension of pork imports from the European Union. The panel ruled that Russia’s import suspension lacks scientific basis, is not consistent with its sanitary and phytosanitary (SPS) obligations and constitutes a disguised restriction on international trade.
While this panel decision is an important reaffirmation of the fundamental tenets of the WTO SPS agreement, it is unlikely to result in any near-term loosening by Russia of its restrictions on imports of EU pork.
UPDATE: As expected, Russia appealed the Dispute Settlement Panel ruling but on Feb. 24, 2017, the WTO Appellate Body upheld the panel’s decision. Russia’s Ministry of Economic Development responded to the decision by stating that Russia will implement the Appellate Body decision but noted that “the parties will have to develop new conditions from scratch.”
Beyond the restrictions that are the subject of the dispute in the WTO, it is important to note that several other obstacles to the full restoration of EU pork exports to Russia remain. EU pork muscle cuts are included in Russia’s food import embargo, which was imposed as a counter-measure in response to economic sanctions stemming from the ongoing conflict in Ukraine. The embargo has been in place since August 2014 and is unlikely to be lifted until EU sanctions against Russia are eased or eliminated.
UPDATE: Following meetings held in June 2017, the two parties communicated to the WTO that Russia would make the changes in its policies to come into compliance with the Dispute Settlement Panel’s findings by early December 2017. While this is an encouraging development, it is important to note that other obstacles are likely to further delay resumption of EU pork exports to Russia. Most notably, the EU (and other western nations) recently extended economic sanctions imposed on Russia due to the conflict in Ukraine, and Russia extended the food import embargo implemented in response to these sanctions through the end of 2018. As noted above, the embargo has been in place since August 2014 and is unlikely to be lifted until EU sanctions against Russia are eased or eliminated. Pork fat and offal are included in the ASF-related import ban but were not covered by the embargo, so there was some hope that EU exports of those products might soon resume to Russia. However, in late October 2017, the embargo was expanded to include pork and beef offal and animal fat. See more details in this USMEF Exporter Update.
UPDATE: At an early January 2018 meeting of the WTO’s Dispute Settlement Body, the EU requested authorization to impose retaliatory measures, asserting that Russia failed to come into compliance with its obligations within the “reasonable period of time” agreed to by the parties. The EU states its intention to suspend benefits at an annual level equal to 1.39 billion euros, plus a yearly increase of 15 percent. The Dispute Settlement Body has referred the matter to arbitration.
It is important to note that the WTO has only ruled that Russia’s ASF-related ban on pork imports is non-compliant, and has not issued any findings related to Russia’s broader economic embargo. News reports suggest that the EU intends to use the arbitration process to first determine whether the value of its claim is justified, then use further procedures to determine if the retaliatory measures can be imposed.