BELARUS NEWS AND ANALYSIS

DATE:

18/10/2006

Russia Limits Belarusian Import

Russia plans to limit state imports from Belarus, Deputy Economic Development and Trade Minister Andrey Sharonov said. The ministry explains, however, that this is just a response to the discrimination of Russian goods in Belarus. Yet, the curtailing of imports, to be introduced by November, looks like a tool to influence Alexander Lukashenko's regime in negotiations over gas prices for 2007.

Russian Economic Development and Trade Minister Andrey Sharonov confirmed yesterday, speaking to State Duma deputies that he had sent a letter with a suggestion to limit state purchases of Belarusian goods to the Agriculture Ministry and heads of Russian regions. The letter of the economic ministry was signed back in mid-July. It asks to give remarks on the exclusion of some Belarusian goods from the list of Russian federal and regional orders. The Sharonov List has been discussed by Belarusian mass media for a few days already. On Wednesday, Russia officially confirmed plans to limit state imports from Belarus.

Nevertheless, Andrey Sharonov said this proposal does not mean an unofficial trade embargo. "There are no curbs," the minister said yesterday. "Any person is free to buy what they have been buying - and in any amounts. We are going to make a decision on limiting state orders of those Belarusian goods that are not unique for some of our recipients." Belarusian press mentions curtailing imports of such goods as furniture, sanitary engineering, ceramic tiles, meat products, vegetables and synthetic cleansers.

The Economic Development Ministry posted an official statement on its web-site with explanations following Andrey Sharonov's speech at the Duma. A new law came into force this January determining rules of state purchases and describing the so-called national regime for some foreign companies which could get access to state orders on the same conditions as Russian producers. "However, this regime is based on mutual terms only," the statement says. The ministry does not mention if analysis of terms of access to state purchases has been conducted in other countries. But as far as Belarus goes, there have been "terms which limit the access of Russian producers to tenders and create unequal conditions" in the tenders' procedures.

The discrimination of Belarusian goods in Russian state orders can be considered a decided matter, but the Economic Development Ministry still underscores that it has not been officially signed into a law yet.

The volume of Belarusian goods bought on Russian budget money is unknown. But the ministry's decision will surely send the declining Belarusian import further down. It fell to $10 billion from $11 billion last year. Judging from the list of the goods that are proposed to be limited, the Belarusian imports can drop as much as $200 million.

Belarusian authorities decline both "plans of the Russian budget to discriminate its goods" and their own discrimination of Russian manufacturers. Russia's state purchase regime with Belarus has not been altered since 2003. A new bill on state orders took effect this January and the first steps to create a system of "mutual discrimination in state purchases" for Russia and Belarus were taken in July, just as Gazprom announced a hike in gas prices for Belarus up to $200 per 1,000 cu. meters in 2007. Information about the Sharonov List cropped up as Transneft revealed plans to cut oil supplies for Belarusian oil refineries. The decision was reportedly made after the examination of the Druzhba pipeline and the meeting of Alexander Lukashenko and Azerbaijan's President Ilkham Aliev where the two leaders discussed oil deliveries from Azerbaijan to Belarus via the Ukrainian Odessa-Brody gas pipeline.

Curbs of the Economic Development Ministry will damage not only Belarusian firms but Russian companies as well. Belarusian goods from the list of Russian state purchases are normally imported by Russian traders. Only large Belarusian companies export goods on their own, but their products are not on the Russian ministry's list.

Alexey Shapovalov

Source:

http://www.kommersant.com/p714553/r_528/Russia_Limits_Belarus_Imports/