MFA DID NOT CLEAR VPSS REFUSAL TO REGISTER U.S.

C O N F I D E N T I A L MOSCOW 002825 SIPDIS DEPARTMENT FOR EUR/RUS STATE PLS PASS USTR (PORTER, KLEIN, HAFNER) STATE PLS PASS USDA/FAS (FLEMINGS, KUYPERS, HAMILTON) E.O. 12958: DECL: 09/19/2018 TAGS: EAGR ETRD ECON WTO RS SUBJECT: MFA DID NOT CLEAR VPSS REFUSAL TO REGISTER U.S. POULTRY PLANTS REF: A. MOSCOW 2788 ¶B. MOSCOW 2740 ¶C. MOSCOW 2579 Classified By: Economic Minister Counselor Eric T. Schultz, Reasons 1.4 (b,d). ¶1. (C) SUMMARY: MFA officials told us on September 19 that they were unaware of the subject letter from Russia's veterinary service. The letter refused to add U.S. poultry, pork and beef facilities to the list of eligible exporters due to doubts about the continued validity of the U.S.-Russia bilateral WTO agreement on market access and the side letters on agriculture which were signed in November 2006 (Ref A). According to the MFA, the GOR is still engaged in interagency discussions about which WTO commitments Russia made in advance of accession need to be revisited. Embassy officers emphasized that we consider the agreements to be binding and expect the GOR to abide by their provisions. END SUMMARY. -------------- VPSS Letter Not Cleared with MFA -------------- ¶2. (C) On September 19, Embassy ECON and FAS officers met with Vyachislav Moshkalo, head of the Economic Section in the MFA's North America Department, to discuss the Russian Veterinary Service (VPSS) letter questioning the validity of the November 2006 U.S.-Russia bilateral market access agreement and side letters and refusing to register any more U.S. poultry, pork and beef facilities (Ref A). Moshkalo said he had not seen the letter, which we then provided to him. He then told us that the MFA had not seen nor approved the letter prior to its delivery to us, despite its language advising the USG to consult with the MFA for further details on the continued validity of the bilateral market access agreement and side letters. ¶3. (C) Moshkalo said the GOR had not yet completed interagency discussions about which of Russia's WTO commitments should be suspended, following PM Putin's and First Deputy PM Shuvalov's August 25 statements about the need to reopen certain WTO commitments that were "no longer in Russia's interests" (Ref C). Moshkalo said that he would check with VPSS about the meaning of the letter, and noted that this could be a "technical problem having to do with relations between certain agencies" within the GOR. ¶4. (C) Embassy officers noted that, in the absence of any official notification from the MFA or Ministry of Economic Development, we considered that the November 2006 market access agreement and side letters were still in effect, and we expected the GOR to abide by their provisions. We expressed concern about the apparent unilateral action by the VPSS not to honor the agreement. -------------- --- Request for Consultations on 2005 Meat Agreement -------------- --- ¶5. (C) Moshkalo said Economic Development Minister Nabiullina had sent a letter to U.S. Trade Representative Schwab requesting consultations on various agricultural issues, including meat imports and biotechnology. Embassy officers confirmed that we had received the request for consultations, which is now under consideration in Washington, but we made clear that the request was for consultations solely on the 2005 Meat Agreement, which governs the volume of U.S. poultry, pork and beef imports. If the GOR had a broader interpretation of the request for consultations, we asked the MFA to consult with other agencies and inform us. Moshkalo demurred and said that the scope of consultations would be discussed by experts. -------------- Pace of Accession -------------- ¶6. (C) Moshkalo observed that Russia's WTO accession before the end of 2008 appeared unlikely, given that there were many technical legislative amendments to Russian law that still needed to be approved by the GOR and the Duma. Embassy officers noted, and Moshkalo agreed, that the September 18 organizational meeting in Geneva had been constructive. The accession working group had agreed to hold the next round of informal plurilateral discussions on the Working Party Report on Russia's accession during the week of November 3. -------------- COMMENT -------------- ¶7. (C) It appears that VPSS acted unilaterally in sending the September 16 letter. The GOR is apparently still deciding what commitments related to its WTO accession it plants to revisit. At best, this means that no one in the GOR is actively coordinating the accession process among Russia's various ministries and agencies, and reining in the protectionist elements at the Agriculture Ministry. BEYRLE