“Ukraine’s desire to conclude an Association Agreement with the European Union will affect the access conditions for Ukrainian livestock products to the Russian market,” reported Sergei Dankvert, head of Russian veterinary watchdog Rosselkhoznadzor .
“We would have to renegotiate access of Ukrainian livestock products to the Russian market almost completely, due to the forthcoming signing of the EU-Ukraine Association Agreement,” he added.
Ukraine hopes to sign the agreement, which would include the establishment of a free trade zone with the EU, during the Eastern Partnership Summit on 28-29 November in Vilnius.
However, Russia is concerned that the agreement would open Ukraine to a flood of low-priced meat from EU countries that are currently banned from exporting to Russia.
Trade war
EU and Ukraine authorities believe Russia is using the threat of import restrictions as a tool for political pressure.
“Of course, there are attempts to start a trade war. When there is such a risk, two things are necessary: first, remain calm, and secondly, turn to the World Trade Organisation (WTO) for justice,” European Commissioner for Trade Karel De Gucht advised Ukrainian authorities on the situation.
However, experts say a trade war could be disastrous for Ukraine.
“We currently export up to 40% of our meat products in certain categories to Russia. The market is open to 15 Ukrainian manufacturers – and these are major companies, which employ whole areas of the country. If Russia actually closes its market, it would cause an immediate collapse of the industry. Large companies would survive, but the smaller ones would be forced to leave the market. The Ukrainian authorities have to do anything to avoid it,” said a member of the Meat Union of Ukraine, who wished to remain anonymous.
According to the Russian Federal Statistics Service, any blocking of agricultural imports from Ukraine by Russia could result in losses for Ukraine of up to US$5.5m per day.