New Zealand has lost $100 milion in trade with Russia since relations began to deteriorate following the outbreak of war in Ukraine
The Kremlin has dropped a fish and meat bomb on New Zealand. The casualties are reported to be women, children and the elderly forced to eat food formerly sold to Russia; together with fishermen and farmers whose annual income of US$100 million from exports to Russia has been lost since the start of the Ukraine war.
After the New Zealand Prime Minister, John Key, attacked Russian policy in Syria and on September 26 issued a public insult to President Vladimir Putin, Moscow reacted with the announcement, nine days later, that New Zealand (NZ) exports of meat and fish may be banned from the Russian market. The NZ media have broadcast the prime minister’s attack on Putin; they are not revealing the Russian reaction. NZ government organs, including the NZ Ambassador to Moscow, Ian Hill, refuse to acknowledge the threatened food ban, or to discuss what is happening.
On October 5, Sergei Dankvert (below, left), head of the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor, RSN – below right), announced that a ban was being considered after traces of mercury had been found in imports of NZ fish and of listeria bacteria in imports of NZ meat.
“We are considering restrictive measures regarding products from New Zealand,” Dankvert reportedly said. “It concerns fish and chilled meat,” he added. “Summing it up, we are going to consider the need to impose restrictions on a number of products or for certain types of products.” The Tass news agency report can be read here.
There is no official release from RSN. Asked to clarify the details, Dankvert’s spokesman, Yulia Melano, responded by saying that RSN laboratory testing had found “an excess of mercury in fish and also the presence of listeria. Also, the monitoring proved the presence of listeria in meat from New Zealand.”
According to Melano, RSN is now “monitoring new supplies. If the presence of mercury and listeria remains, this production will be banned until the normalisation of these points. Milk and butter [imported from NZ] are also under control, but everything is in the normal grade with them. The NZ side was informed about the first results of the testing. But there was no reaction nor discussions because the testing isn’t finished yet. Possibly it is a single case. Now we are collecting information from the regions before making the final decision.” Asked when the testing had taken place, and the mercury and listeria discovered, Melano said she did not remember, and referred the question to Dankvert’s office. He has said nothing more.
The NZ Embassy in Moscow was asked when Rosselkhoznadzor (RSN) had notified the New Zealand side about the testing results for mercury and listeria; what products had been tested; and what subsequent discussions have been held by RSN and their NZ counterparts. Charles Gillard, Second Secretary Trade and Economic at the Embassy, replied: “We have passed your questions on to our authorities in Wellington, and are currently awaiting their response.”
He was followed on Wednesday by a NZ Government spokesman from Wellington. He said: “We are aware of media reports in Russia, quoting a Russian official, suggesting that restrictive measures may be placed on New Zealand meat and fish. We have not been formally notified of the matter by the Russian authorities. The New Zealand Ministry for Primary Industries is working to seek greater clarity in relation to the comments. New Zealand and Russian technical agencies will continue to work constructively to ensure the highest standards of food safety can be applied to imports and exports between our two countries.”
Gillard and his Wellington colleagues did not provide trade volume or value statistics for the exports of NZ meat and fish to Russia. Instead, they claimed “you can find detailed trade statistics on the Statistics New Zealand website: stats.govt.nz, particularly the Global New Zealand statistics year book.” In practice, this is impossible.
Russia accounts for a much bigger proportion of NZ’s imports than NZ’s share of the Russian import market. NZ trade statistics for Russia by product and by year cannot be accessed from the government’s statistical service website. Russian trade statistics for NZ are easier to access, though they omit part of the NZ butter trade with Russia, which comes via Europe and is not accounted for as a direct export. In the past, butter has been Russia’s principal import from NZ.
Notwithstanding, the picture is clear. The Ukraine war, and the NZ government’s decision to ally itself with the US and the European Union, has cut NZ’s export value to Russia in half, and is costing NZ about US$100 million per year. Russian exports to NZ are less affected. They are almost entirely oil and petroleum products; in volume and value they peaked in 2011, fell back in 2012, but they have been rising since then.
RUSSIA-NEW ZEALAND TRADE, 2007-2015
Russian oil and petroleum products amount to 98% of the total For more on this Russian trade data source, Russian Exports, National Information Portal, see:
MAIN NEW ZEALAND EXPORTS TO RUSSIA, 2014-2015
THE COLLAPSE OF NEW ZEALAND TRADE WITH RUSSIA, 2014-2015
Source: Russian Customs
New Zealand Trade & Enterpise (NZTE) is the government’s export promotion agency. On April 23, 2013, it issued a report claiming “New Zealand’s food and beverage exports into Russia are worth over US$165 million, with dairy products accounting for over 50 percent of total food and beverage products. There has been a notable drop in exports of dairy, fruits and vegetables products and meat offal into Russia over the past years. However, packaged cereal, flour, and milk products have experienced the highest growth over the last three years (43 percent) although its total share of food and beverage exports is only five percent.”
The NZTE bureaucrats told their food producers and exporters they could plan on profitable growth in Russian demand for NZ foodstuffs because of “a growing [Russian] middle class … fuelling the demand for packaged food, as well as more casual dining options in the foodservice industry.”
On August 17, a month after Clark’s visit to Moscow, Key’s foreign minister, Murray McCully (below, left), was in Moscow for an official session with his Russian counterpart, Sergei Lavrov (right).
Lavrov minced diplomatic words ahead of the talks with McCully, but he made clear NZ’s involvement in the war against Russia was impacting bilateral trade. “We are now meeting in Moscow, and I am very happy to see you. We maintain a good personal relationship that helps strengthen the contacts between our foreign ministries. Certainly, our contact in a number of areas is not what it was due to external factors that have nothing to do with our bilateral relations. I hope that you and I will be able to discuss the prospects for resuming normal relations today, and I see New Zealand’s interest in this as well.”
In case he hadn’t been understood by the NZ media accompanying McCully, Lavrov repeated his observation about the war against Russia during the press conference after the talks. “In the past two years, our relations have somewhat slowed down, having become hostage to fleeting political interests which have nothing to do with our interest in deepening bilateral relations.”
“In any case, we welcome the positive dynamics in our political dialogue, including between the foreign ministries of Russia and New Zealand. We agreed to make additional efforts to achieve practical results in the trade, economic, investment and cultural spheres, and to speed up our work on individual legal and contractual instruments that are being considered by the parties. Overall, we are convinced that we have very good potential to build up mutually beneficial relations across many areas.
“As always, we will be ready to exchange opinions on international issues in the Asia-Pacific region and in other regions of the world, especially considering the fact that New Zealand is currently a member of the UN Security Council where we cooperate closely; we are interested in exchanging these opinions. We exchanged views on key issues of the international agenda. We noted with satisfaction that our approaches align on many of them. Our foreign policy dialogue with New Zealand has remained uninterrupted. For many years, my colleague, Minister of Foreign Affairs of New Zealand Murray McCully, and I, as well as our deputies and directors of our respective foreign ministry departments, have held regular consultations, exchanged views and taken into account each other’s positions as we developed our respective national positions. This year, our relations with regard to international issues are of particular importance given that New Zealand is a non-permanent member of the UN Security Council. During the UNGA Leaders’ Week in September, New Zealand will chair the UN Security Council and plans to use this occasion to hold a special meeting at the level of foreign ministers and leaders. We agreed that we will support this initiative and make sure it focuses on substantive issues.”
The NZ press didn’t report a word.
In the NZ Government’s version, McCully admitted the trade decline was connected to the Ukraine conflict. “Bilaterally we have seen trade relations decline in the last two years. New Zealand and Russia hold different views on the situation in Ukraine, and while we are not part of the sanctions or counter-sanctions process, these differences have constrained trade relations. Today we have discussed how we can improve trade outcomes within the current policy settings, and looked forward to the opportunity to improve those settings, and maximise the real potential for our trade and economic relations, as conditions permit. In that regard, I emphasised New Zealand’s support for the Minsk agreements and their full implementation as a basis for resolving this very serious situation. Also, on the bilateral front I recorded New Zealand’s appreciation of Russia’s intention to send a naval vessel to be part of the 75th anniversary of the New Zealand Navy later this year. We also discussed our shared interests in Antarctica.”
Russian press analysis was hopeful that there might be a “reset” in Russia-NZ relations, but noted that this was up to the New Zealanders to choose. “The question on Ukraine has also stalled the negotiations on the formation of a free trade zone between New Zealand and the [Russian-led] Customs Union, which has now evolved to become the Eurasian Economic Union (EEU). This initiative meets the interests of New Zealand’s producers and there is hope that this project will be brought to the table once again in the future.”
NZ press coverage of McCully’s talks revealed that trade wasn’t on the list of priorities – getting a Russian vote for Clark was more important. And so too, was the NZ Government’s decision to allow a nuclear-armed US warship to make a port call in New Zealand this year; this is the first nuclear-armed warship in more than a quarter century, since NZ banned nuclear weapons from the country and its waters in 1987.
The failure of McCully to achieve much in Moscow was mocked by this NZ commentator. He failed to detect the warning signal from Lavrov. He missed altogether the significance of the resumption of American nuclear arms in NZ.
Prime Minister Key then attacked Putin in this NZ radio broadcast on September 26. Reiterating NZ’s backing for the war to overthrow President Bashar al-Assad in Syria, and published allegations of Russian involvement in the deaths of Syrian children, Key added his interpretation of Russian policy: “Maybe the main thing is Vladimir Putin’s ego. He wants to say ‘you want to get resolutions to issues, I’m your guy and come to Moscow.”
In Moscow, supermarkets and restaurants say they aren’t aware of the threat to ban NZ fish and meat. They say it won’t matter. A spokesman for the French-owned Auchan chain, one of the largest food retailers in Russia, said: “Fish from New Zealand isn’t present in Auchan hypermarkets. As for meat, [the NZ] share in the total portfolio is insignificant.”
The NZ trade office for Europe is headquartered in Hamburg, Germany. It said yesterday that all questions of NZ trade with Russia are handled by the NZ Embassy in Moscow. The ambassador, Ian Hill, was appointed last November. He had also been his country’s ambassador to Russia in 2009 to 2012.
Hill was asked to clarify the details of the RSN testing of NZ fish and meat imports to Russia, and confirm what contacts there have been at the official level to consider a remedy. He was also asked to say if “the threat of a ban, without technical follow-up, means the affair is a political message. What is your interpretation of the Russian message to the NZ Government in this affair?” At press time Hill was refusing to reply.
Source: Dances with Bears