The Russian bear bites back – Putin imposes 'full embargo' on food imports

Russia has announced a 'full embargo' on food and agricultural imports from EU countries, the US and other western nations including Australia, Canada and Norway.

empty supermarket trolley
Russia has announced a ‘full embargo’ on food and agricultural imports from EU countries, the US and other western nations including Australia, Canada and Norway.In a move that is widely seen as a response to the sanctions imposed against Russia following the shooting down of Malaysia Airlines flight MH17, President Putin has published a decree on the Kremlin website that he says will last for one year.Prime Minister Dmitry Medvedev said in a statement that the embargoed goods would include vegetables, fruit, fish, meat and dairy products.In the last two weeks, the Russian government has banned imports of Romanian beef, Polish vegetables and fruit, meat and dairy products from Latvia as well as cereals, fruit and milk from Ukraine and vegetables from Moldova. The reason cited was one of public health, but the move was seen by many commentators as a thinly veiled retaliation for countries’ such as Poland calling for strong action over Ukraine.Russia’s use of food hygiene inspections to limit imports is not a new phenomenon. They have been a source of complaint among foreign businesses for some time, and many companies have claimed that the inspections have cynically been used to justify import restrictions, so undermining the commitment to open its markets that Russia made to the World Trade Organisation when it joined in 2011.Russia is reliant on food imports with more 40 per cent of consumables being supplied from outside the country. Although Russia has enormous areas of arable land, there has been little investment and a lack of strategic policy since the collapse of the Soviet Union in 1991.Speaking to the Financial Times, Chris Weafer, a partner at Macro-Advisory, a Moscow-based consultancy commented, “Import bans on food hygiene grounds are very much the government’s preferred instrument because they want to occupy the economic moral high ground – they have criticised the western sanctions as a violation of free trade rules, and with this kind of non-tariff trade barrier you can easily argue that you’re conforming with WTO rules and not engaging in tit-for-tat retaliation.”“But they have to pay attention not to cause another spike in food inflation – that could shatter people’s belief in the government’s line that sanctions are no big deal.”