October 11, 2013

Ukraine-EU agreement may jeopardise Ukraine meat exports to Russia

Russia may review the import of meat and products from Ukraine should Ukraine proceed with plans to sign an association agreement with the EU, according to Russian agricultural watchdog Rosselkhoznadzor.

"We will have to review practically all the terms of access to the Russian market for Ukrainian meat production due to the impending signing of an association agreement between Ukraine and the EU," according to Sergei Dankvert, Chief of the Russian agricultural watchdog, Rosselkhoznadzor.

After the agreement with the EU is signed, the terms for access to the Ukrainian market for European product will change, access will expand, meaning the automatic necessity of reviewing the terms for the import of Ukrainian product into Russia, he said, pointing to the lack of proper controls over the quality of exported products in the EU.

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, among other potential political concerns.

Currently, there are 15 Ukrainian companies with the right to export meat product to Russia, and sixteen dairy enterprises. A member of the Meat Union of Ukraine states that Ukraine currently exports up to 40% of its meat products in certain categories to Russia.

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.

Meanwhile, Ukrainian Prime Minister Mykola Azarov to foreign media on Thursday, "We have great potential, and combining it with Europe will greatly enhance it. Not only do we need Europe, but we are needed by the European Union."

Ukraine's pursuit of an accord on European Union integration involves the signing of an Association Agreement and a free-trade accord with the EU at the Eastern Partnership Summit during Nov. 28-29 in the Lithuanian capital of Vilnius. The pact has been in the works since 2008 and would prevent the nation from joining Russia's customs union, which so far includes Kazakhstan and Belarus. Apart from Russia, Ukraine is the largest region of Europe outside the EU.