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International Egg and Poultry Review

by 5m Editor
22 November 2006, at 10:23am

By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week looking at the latest in Russia.

Russia

The United States (U.S.) and Russia reached an agreement on Friday, November 10, 2006 on Russia’s eventual entry in to the World Trade Organization (WTO). However, talks continued to ensure the bilateral agreement was signed at a summit of the Asia-Pacific Economic Cooperative (APEC) forum in Hanoi, Vietnam. The agreement was signed on Sunday, November 19, 2006 in Hanoi, Vietnam during the APEC summit by Russia’s Economy Minister German Greff and U.S. Trade Representative Susan Schwab before a meeting between Russian President Vladimir Putin and U.S. President George Bush. The U.S. was the last major country to achieve a bilateral agreement with Russia on its quest to join the WTO.

Russia, the largest economy outside the 149 member WTO, has been negotiating since 1994 for entrance first into the general Agreement on Tariff and Trade (GATT) and then to the WTO. With the completion of negotiations with the U.S., Russia has completed bilateral talks with 58 of the 60 member Working Party of the WTO. The 2 remaining countries Russia has to complete negotiations with are Moldova and Georgia – both of which Russia has trade disputes with.

After Russia has reached agreements with Moldova and Georgia, Russia must complete multilateral negotiations with the WTO as whole on a comprehensive working party report and protocol of accession. It is estimated to an additional 6 months to little more than a year for the process to be finished. The agreement must also be ratified the U.S. Congress and in Russia before membership is complete. Even though the U.S. Congress could not approve the agreement, they do not have the power to block Russia’s accession to the WTO.

Besides approving the agreement, Congressional action is also necessary for the United States to grant Permanent Normal Relations (PNTR) to Russia according to WTO rules. In order to grant PNTR to Russia the Jackson-Vanik Amendment may have to be repealed. The Jackson-Vanik Amendment is contained in Title IV of the 1974 trade Act. It effectively denies unconditional normal trade relations to certain countries, including Russia, that had non market economies and that restricted emigration rights.

Normal trade relations may be extended, on a conditional basis, to a country subject to the law only if the President determines that it complies with the freedom of emigration requirements of the amendment. Semi-annual reports on continued compliance of that country must be submitted to Congress. The President may also waive the requirements. Since 1994, Russia has been found in compliance with the freedom of emigration requirements. Ending the application of the Jackson- Vanik amendment to Russia requires legislation by Congress. In signing the agreement, Russia has agreed to lower tariffs by about 3% on manufactured and agricultural products. However, Russia will maintain the right to extend U.S. quotas on U.S. meat after 2008 and the U.S. has agreed to let Russia inspect meat production facilities in the U.S.

However, previously Russia and the U.S. jointly inspected all pork or poultry facilities that wanted to export product to Russia. The process prevented exports from new plants , or plants needing to remedy a deficiency found during the joint audit, until the next joint inspection occurred. Under the new agreement USDA’s Food Safety Inspection Service (FSIS) is authorized to certify new facilities and/or facilities needing to remedy a deficiency found in the annual joint audit by USDA and Russian officials. If a facility fails a joint inspection it will be de-listed until it is recertified by FSIS. The agreement also implements a new process whereby the annual joint audits will review upt to 50% of the newly certified facilities FSIS approved since the last inspection; up to 100% of the facilities that at the most recent (previous) joint inspection were found deficient but in the interim were approved by FSIS; and 10-15% of the other facilities currently eligible to export pork and poultry to Russia.

The need to inspect U.S. meat production facilities is a result of continued concern from Russia about the sanitary concerns used in imports of meat from Russia. Diseases of specific mention were pork and beef diseases flesh worm and mad cow. Russian Agriculture Minister Alexei Gordeyev has indicated that should there be violations or even suspicions of violations of the delivery of non-quality or dangerous products and they have the right to stop import of such products according to international veterinary standards.

The U.S. presently enjoys concessions under the Bilateral Meat Agreement signed in 2005 that will remain in force until 2009 when the Bilateral Access Agreement will come into force. The Bilateral Meat agreement allowed for quotas of 1.2 billion metric tons (MT) of poultry meat, 450,000 MT of beef and 502,000 MT of pork. Currently the U.S. has guarantees for about 75% of Russia’s total poultry imports. The amount Russia imports from the U.S. may change in the future because they are presently engaging in discussions with both Columbia and Mexico that would allow them to export meat to Russia.

While negotiations were occurring for U.S. approval of Russia’s entry into the WTO, poultry consumption of meat in Russia started increasing to 4% in June, 2006 after dropping following the outbreaks of avian influenza at the end of 2005. Poultry production also increased in the first 9 months of the year to almost 19%. The increase in poultry production almost reached the 1990 level of 180,000 MT.

A mile stone that has not been reached since. Egg production increased 2.8% from January-July, 2006 over the same period last year to 22.6 billion eggs. Broiler production is expected to grow 18% in 2007 and turkey production is also growing with new production facilities being constructed. Meanwhile, poultry imports during January-August, 2006 period fell to 818,000 MT from 834,000 MT from the same period last year.
Sources: various news sources

To view the full report, including tables please click here

ThePoultrySite News Desk

5m Editor