The EU believes that the Russian import restrictions are incompatible with the WTO, notably with the Agreement on the Application of Sanitary and Phytosanitary measures (SPS Agreement) and the GATT 1994. At the EU’s request, and as part of the initial stages of the dispute, consultations were held on June 2-3, 2014 between Russia and the EU. However, their outcome did not lead to a lifting of the measures or any proper justification for them to be maintained. Unfortunately, subsequent bilateral discussions also did not bring any progress.

"Russia's import restrictions on European pork are clearly disproportionate, discriminatory and not based on science," said EU Trade Commissioner Karel De Gucht. "As this goes against international trade rules, Europe has no choice but to request the establishment of a panel at the WTO."

"The EU immediately put in place measures to contain the spread of the disease. Thus, EU products from the non-affected areas are perfectly safe. Despite our efforts over the last five months and the numerous bilateral contacts ewe had with Russia, there is no sign that Russia will allow trade to resume from the unaffected areas in the EU," said EU Commissioner for health Tonio Borg.

"The Russian import restrictions on pig meat from the EU have already had a severe impact on the EU pig sector, requiring crisis assistance measures. During the 5 months the ban has now been in place, European pig meat producers have lost exports worth some €580 million," said EU Agriculture Commissioner Dacian Cioloş.

Upon joining the WTO in 2012, Russia committed to ensure that its measures protecting animal life and health are based on science, not more trade restrictive than necessary and applied without discrimination to its different partners and domestic producers.

The EU and its Member States have long been aware of the threat of the disease coming from the east. In addition to stepping up surveillance, the EU immediately imposed measures to prevent any further spread of ASF once it reached the areas bordering Russia and Belarus. The EU's measures have been taken on the basis of prevailing international standards of the World Organisation for Animal Health (OIE).

Despite this, Russia has refused, since the earliest outbreaks in February 2014, to accept safe imports from the non-affected areas in the EU and maintains a ban that is not based on scientific evidence nor on a proper risk assessment. Russia refuses to amend the export certificate that would allow trade from the unaffected areas in the EU to resume. Moreover, Russia treats other countries with similar or worse outbreaks more favourably, accepting imports from them. Russia also discriminates against others by failing to take measures in its own market despite the numerous outbreaks of the disease on its own territory. In a nutshell, by refusing imports from the parts of the EU unaffected by the disease, Russia would seem to be treating EU products differently both from other trading partners and from those produced domestically.

Russia closed its market to EU live pigs, pork and other related products – cutting off almost 25% of all EU exports – at the end of February 2014. It based its decision on four cases of African swine fever (ASF) detected in wild boars at the Lithuanian and Polish borders with Belarus, ignoring the measures that the EU and the Member States imposed to combat the disease and to contain the spread of the virus.

Extensive bilateral discussions over the last months with Moscow have not brought any results thus far. Given that there seems to be no solution forthcoming, the EU has decided to resort to the WTO's dispute settlement procedures by requesting the establishment of a panel.

The EU’s request for the establishment of a WTO panel was presumably discussed for the first time at a special meeting of the WTO Dispute Settlement Body (DSB) on 10 July 2014. At that meeting Russia objected to the establishment of the panel, under the dispute settlement rules of the WTO. If the EU tables the issue again at the following DSB meeting on 22 August 2014, Russia would not be able to object and, consequently, the panel would be established.

This trade ban has exposed the EU farming sector to significant losses. In 2013, i.e. in the year preceding the Russian restrictions, the value of EU pork exports to Russia reached €1.4 billion, which was around 25% of the whole EU exports. Russia is the EU's third largest trading partner and the EU is Russia's second largest export destination for agricultural products. Overall, in 2013, the EU exported €123 billion of goods to Russia and imported €232 billion worth. While Russian exports to the EU are mainly raw materials (80%), EU exports to Russia are mostly vehicles, medicines, machinery and transport equipment, but also agricultural products.

The virus of African swine fever (ASF) is a lethal, infectious disease of pigs which is harmless to humans or other animals. The virus strain found in the few dead wild boars in Lithuania and Poland matches the virus strain in Russia. The Russian import ban covering unaffected areas in the EU is in stark contrast to the Russian domestic situation. Since 2007, Russia reported around 600 cases in wild boars and 400 ASF outbreaks in farms affecting 500,000 domestic pigs. Against this backdrop, there is little doubt that the disease spread from Russia to Belarus and from Belarus to the EU. The EU calls upon Russia to urgently increase its domestic efforts to eradicate and control ASF and lift its unjustified trade ban against unaffected areas in the EU.

Source: bloomberg.com