Europe

Russia halts Lithuania dairy imports in trade row

Dairy goods in Russian supermarket, Moscow - file pic Image copyright AFP
Image caption Russia is a major market for Lithuanian dairy exporters

Russia has halted imports of Lithuanian dairy produce amid tensions over EU plans to forge closer ties with ex-Soviet republics.

Russia's consumer watchdog said the levels of yeast and mould in Lithuanian dairy produce were unacceptable.

Lithuania is already involved in a bitter dispute with Russia over the cost of Russian gas, which Moscow's former Soviet bloc allies rely on.

Lithuania is leading EU efforts to sign new trade deals with those countries.

Russia's consumer watchdog Rospotrebnadzor has previously imposed various bans on food and drink imported from former Soviet neighbours, for example on wine from Georgia and Moldova, citing health concerns. In July Russia halted imports of chocolate from the big Ukrainian firm Roshen.

Such actions have been widely seen as Russia using trade to put political pressure on its neighbours.

In recent weeks Russian customs officers have imposed time-consuming checks on Lithuanian lorries on the Russian border, leading to long delays and queues.

Last week Lithuanian Foreign Minister Linas Linkevicius warned that Vilnius could retaliate on the border with Kaliningrad, a Russian enclave surrounded by Lithuania and Poland. The city of Kaliningrad is a major port on the Baltic.

Speaking to Reuters news agency, Mr Linkevicius said: "The Kaliningrad region is isolated, geographically isolated, so we could apply some measures also to cut something".

"We could cut off trains, but not only trains, also the supply of goods, whatever. It is theoretically possible. It was not discussed, it's not our way of thinking, it's not our methods," he said.

The European Commission is investigating Russia's gas monopoly Gazprom over alleged market-rigging in Eastern Europe. Last week Lithuania's Prime Minister Algirdas Butkevicius said that in 2006-2012 the cost of Russian gas had soared by 600%, seriously undermining Lithuania's competitiveness.

EU forges closer ties

Russia is a major export market for Lithuanian dairy produce, the bulk of which is cheese, Russia's Itar-Tass news agency reports. In 2012 Lithuania exported 370,000 tonnes of dairy produce to Russia, worth $193m (£120m).

Russia is one of Lithuania's main trading partners, along with Germany, Latvia and some other European countries. The EU received 60% of Lithuanian exports in 2012, while 58% of Lithuania's imports came from the EU.

The EU and Ukraine are preparing an association agreement, with plans to sign it in the Lithuanian capital Vilnius in late November. Such agreements, along with a free trade partnership, are seen as key steps towards eventual EU membership.

Moldova and Georgia - also former Soviet republics - may initial association agreements with the EU.

Russia has been urging former Soviet republics to join a Russian-led customs union, and Armenia recently said it would do so. The EU had been expecting Armenia to sign an association agreement, and told Yerevan that it could not join both trade blocs.

Only Belarus and Kazakhstan have joined Russia in the customs union so far, which Russian President Vladimir Putin sees as a step towards a "Eurasian union".

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