Russia's US Meat Ban: What's the Beef?

Russia Meat products
Mickhail Mordasov | AFP | Getty Images

After nearly two decades of negotiations, Russia finally joined the World Trade Organization in August.

The understanding was that foreign companies could do more business with Russia since WTO rules are meant to create a level playing field for international trade.

Russia would, therefore, be forced to avoid enacting certain protectionist measures.

Instead, the Kremlin got creative and recently banned imports of American beef, pork and poultry products.

Citing concern over the feed additive ractopamine, Russia's Chief Sanitary Inspector Gennady Onishchenko said the ban would be long term.

"We have scientific proof collected into 13 clauses that ractopamine is unsafe," he said. "Additional research is necessary on the safety of [ractopamine] and it is the U.S. who should conduct it."

U.S. Agriculture Secretary Tom Vilsack and United States Trade Representative Ron Kirk fired back with a joint statement on Feb. 11.

"The United States is very disappointed that Russia has taken action to suspend all imports of U.S. meat, which is produced to the highest safety standards in the world," they said. "Russia has disregarded the extensive and expert scientific studies conducted by the international food safety standards body, the Codex Alimentarius Commission (Codex), which has repeatedly concluded that animal feed containing the additive ractopamine is completely safe for livestock and for humans that consume their meat."

Russian websites and blogs indicate the country still stands by the ban and refuses to acknowledge that protectionist measures might be a part of the decision.

But what's really at stake for U.S. companies?

According to the American Meat Institute, last year's exports of beef and pork to Russia were worth more than $550 million. That's a 21-percent increase from 2011.

Iowa is the nation's largest producer of pork and fifth-largest producer of beef.

The U.S. Meat Export Federation says companies like Tyson Foods, Smith Packing Company, and American Foods Group would be affected by the ban.

"Demand for high-quality beef and pork has never been stronger in the Russian market. ... So in the short run, companies that have been making shipments to Russia will need to turn to alternative markets," said Phil Seng, the federation's president."But this does not change the fact that resolving this dispute with Russia must be given the highest priority," he added. "This is an important market that the U.S. meat industry has worked very hard to build and develop, and we must not concede this business to our competitors."

A man buys meat at a butcher's stand in Moscow's Dorogomilovsky market.
Natalia Kolesnikova | AFP | Getty Images
A man buys meat at a butcher's stand in Moscow's Dorogomilovsky market.

But the growth stimulant in question is not a new concern for Russia, and there is much more to the story than ractopamine used in beef.

"It [Russia's ban] certainly has some political dimensions and overtones," said Edward Lozansky, president of the American University in Moscow and founder of the World Russia Forum. "Moscow feels that it is under siege from Washington. …The question then is how to respond? One approach is to toughen the laws against those in Russia who are active in politics and get foreign funding. Another is to strike back where it hurts most, for example, banning child adoptions or certain exports, like in this particular case, meat."

The USDA, though, says this has little to do with souring diplomatic relations between Russia and the U.S.

Vilsack said the ban has more to do with Russian President Vladimir Putin trying to protect his country's food industry.

"Putin wants to favor his own country's agriculture and make it more self-sufficient," he said.

Putin's decision to institute this ban at a time when international trade is already being threatened by the so-called currency wars begs the question: why now?

American businesses that stand to lose money as a result of losing this important market would probably agree — something smells fishy.