October 2, 2003

Russia May Implement New US Meat Quota This Year

Russia may implement new, larger quotas for U.S. poultry, beef and pork as early as this year, so they will be in place for trade in 2004, Allen Johnson, the U.S. Trade Representative's  chief agriculture negotiator, said Wednesday.

"Our bilateral agreement with (Russia) will be implemented...as soon as possible because we're trying to make this effective for 2004," Johnson said.

Russia is the U.S.'s largest foreign market for poultry, valued at about $700 million a year, according to USTR data, and is the fifth-largest foreign market for U.S. pork and seventh-largest for U.S. beef.

The 2003 Russian quota for U.S. poultry, set in May by Moscow to help protect domestic producers there, permits U.S. exporters to ship just 553,500 metric tons, but 141,400 tons of that total is reserved for mechanically deboned poultry - a commodity the U.S. traditionally does not sell to Russia.

The U.S.-based National Chicken Council estimated that the current quota will cause a 40% loss for U.S. sellers.

"It's agreed that they'll eliminate the sub-allocation requirement - the only question is how quickly they can eliminate it," Johnson said. "The U.S. poultry industry wanted it out and the reason they wanted it out is because historically we don't send mechanically deboned meat (to Russia)...because...it had the effect of lowering the (quota)."

Russia has also agreed to do away with the straight quota it imposes on U.S. poultry exports and replace it with a more flexible tariff rate quota. The size of the TRQ for the U.S. has not yet been set by Russia, U.S. Trade Representative Robert Zoellick said in a press conference Tuesday, though he assured reporters the "agreement in principle" with Russia "ensures American poultry, pork and beef exports to Russia at historical levels and adds room to grow."

Johnson, who helped craft the deal, said Russia wants to first establish a global poultry TRQ before it settles on individual amounts for trading partners such as the U.S., Brazil and the European Union.

In a separate U.S.-Russia poultry issue being handled by the U.S. Department of Agriculture, Russian demands on U.S. sanitary requirements for U.S. poultry facilities that export to Russia have still not been fully met. Russia continues to press the U.S. to require employees at poultry facilities to wear special scrubbable, plant-dedicated footwear.

The USDA failed in talks this week to convince Moscow to drop the footwear requirement. Toby Moore, a spokesman for the U.S. Poultry and Egg Export Council, said Tuesday that "the expense of having to build locker facilities, for example, where employees could leave their boots" is too expensive for industry.