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Russia halts dairy imports from EU president Lithuania

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(Globalpost/GlobalPost)

Russia on Monday halted all dairy imports from Lithuania in a trade row over the tiny Baltic state's bid to draw ex-Soviet nations such as Ukraine closer to the European Union.

The decision is the latest in a long series of attempts by Russia to use trade as a weapon against countries it views as part of its geopolitical domain but which are switching their allegiance to Western Europe.

It also threatens to deal a damaging economic blow to Lithuania -- the current holder of the EU's rotating presidency that directs 85 percent of its dairy exports to its giant eastern neighbour.

The Russian agency responsible for overseeing consumer protection said it was imposing the ban due to Lithuania's "weak control" over the quality and safety of its dairy products.

"The Russian Federal Consumer Rights Protection and Human Health Control Service is halting the import into Russia of milk and dairy products produced in Lithuania," it said in a statement.

The agency's chief quickly denied charges that the restrictions were rooted in high-stakes politics.

"The only policy we follow is making sure that our laws on dairy quality and safety are followed without fail," Gennady Onishchenko told reporters.

But the EU expressed doubts that Russia was acting in good faith.

A spokesman for EU Health Commissioner Tonio Borg said his office had full confidence in Lithuanian dairy products and accused Russia of adopting "unnecessarily strict" standards.

Russia must ensure that "the measure taken must be proportionate to the level of risk identified," spokesman Frederic Vincent said in a statement.

Lithuania's President Dalia Grybauskaite separately threatened to take the matter up with the World Trade Organization -- the trade arbiter Russia only formally joined last year.

"It is necessary to prepare to turn to (the) WTO over trade disruptions applied by Russian institutions to Lithuania," she told Lithuanian radio.

Tensions ahead of Vilnius summit

Lithuania has long lobbied the European Union to respond to arduous customs checks that Moscow has imposed on Eastern European countries now seeking closer relations with the bloc.

Both Ukraine and neighbouring Moldova hope to sign landmark association and free trade agreements with Brussels during a November 28-29 summit in the Lithuanian capital.

But Moscow wants to draw Ukraine into a Russia-led economic union that also includes ex-Soviet Kazakhstan and Belarus.

Russia's previous customs restrictions prompted Lithuania to point out that it could -- but would not -- impose the same sanctions on goods travelling over its territory to and from Russia's western exclave of Kaliningrad.

That threat appears to have especially angered Russia.

Onishchenko had said over the weekend that Russia would impose only a partial ban on Lithuanian dairy and Monday's decision was tougher than expected.

An unidentified Russian source further told the Prime news agency that Moscow was also "strengthening control" over the import of Lithuanian fish and meat.

Lithuania's dairy industry -- responsible for about one-fifth of its agricultural production -- is a vital part of export revenue.

Moscow's restrictions would will immediately impact sales that reached 151 million euros ($205 million) last year.

Previous trade wars have seen Russia slap sanctions on Moldova and Georgia as they attempted to set up a process towards eventual membership in the European Union.

Russia has also twice cut off natural gas supplies to Ukraine and waged brief energy wars with Belarus.

Yet some analysts question Russia's tactics and point out that they appear to have done little to curb Ukraine's ambitions to move closer to the EU.

"These measures only alienate the countries that they are aimed against," said Alexei Makarkin of Moscow's Centre for Political Technologies.

"But what other levers of power do we have left?"

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http://www.globalpost.com/dispatch/news/afp/131007/russia-halts-dairy-imports-eu-president-lithuania-0