Russia may have just started a trade war with the United States, though it strongly denies that’s the case.
On Thursday, the U.S. Congress passed a long-awaited bill eliminating Cold War-era trade sanctions on Russia. The only catch? At the insistence of leaders from both parties, Congress paired the legislation with another bill criticizing Russia for human rights violations, specifically the death of Sergei Magnitsky, a whistle-blowing lawyer who died in a Moscow prison in 2009 after allegedly being tortured and denied medical care.
The next day, Russia announced it would halt imports of American beef and pork because the U.S. Department of Agriculture does not test American meat for the feed additive ractopamine. That’s bad news for the meat industry in the U.S, which exports $500 million of beef and pork to Russia annually.
“In Montana,” Rice says, “1 in 5 jobs is tied to agriculture, and ranching is a major factor in our economy. When we can sell more beef to other countries, that creates more jobs here in Montana.”
In an earlier interview with Latitude News, Rice argued the best course of action would be for Congress to repeal the Jackson-Vanik amendment of 1974 in one bill, thus granting “permanent normalized trade relations” to Russia, and consider the so-called Magnitsky Act in a separate piece of legislation.
President Obama urged a similar solution, but Congress didn’t listen. Obama hasn’t signed the legislation yet, and it’s possible Russia is using the ractopamine dispute to pressure him into sending the bill back to Capitol Hill.
Rice described his reaction to Russia’s announcement as “extremely disappointed.”
“The Russians are even stopping the shipment of meat already en route to Russia,” he says. “It definitely doesn’t bode well for getting us started on the right foot to expand trade opportunities.”
In a press release, U.S. Agriculture secretary Tom Vilsack says the import ban could violate the rules of the World Trade Organization, which Russia only joined this summer.
From Moscow to Montana
To many in the U.S., the timing of Russia’s decision is fishy, to say the least. A report by Reuters quotes industry analysts as saying the move “smack[s] of political retaliation.”
But in an interview with Latitude News, a press spokesman for the Russian Embassy in Washington D.C. insists there is no connection between Congress’ legislation and Russia’s ban on U.S. meat imports.
“There is absolutely no link between the Magnitsky bill and Russia’s decision,” Yevgeniy Khorisko explains. “On December 5th, Russia informed the USDA that according to Russian law it’s illegal to import meat products that contain ractopamine. Beginning December 7th, the import of meat without laboratory tests declaring it free of ractopamine will end.”
Khorisko adds that several other states – including the European Union and China – ban the use of the drug.
“It’s not the first time we’ve told the U.S. minister of agriculture about this problem,” he says.
But Errol Rice thinks the Russians are way off base about ractopamine, which helps produce more lean meat in animals, noting the FDA has approved it. He argues that “there’s absolutely no scientific evidence that this feed additive has any adverse effects to meat quality or human health.”
In July, Latitude News talked with Rice about the burgeoning trade in cattle between Montana and Russia – two unlikely partners joined by a shared love of beef. Rice said that Montana cattlemen would greatly benefit from the repeal of the Jackson-Vanik amendment.
The decimation of Russia’s cattle herds since 1917 has led to a major beef shortage today. Writing in Western Horseman, Ryan T. Bell reports that Russia “imports 40 percent of its red meat, a steak costs $75 in a Moscow restaurant, and the beef in village grocery stores is . . . just one step above boot leather.”
Steaks, tenderloins and rib cuts are already big hits from St. Petersburg to Moscow to Vladivostok. But what Russians really love, Rice explains, are the cuts Americans call “offal” or, more generously,”variety meats”: livers, tongues and other organs.
“These aren’t necessarily the cuts that are in high demand by U.S. consumers,” Rice says, “but Russians see a lot of value in them.”
And with so much empty grassland, he argues, western Russia is a great place for raising live cattle. In fact, a Montana cowboy named Darrel Stevenson is doing just that at the 13,000 acre Stevenson Sputnik Ranch in Shestakova, Russia.
The Magnitksy affair
In 2008, Sergei Magnitsky, a legal adviser for an American investment firm in Moscow, accused local officials of embezzling $230 million. Instead of investigating his claims, police arrested Magnitsky for tax evasion. He died in prison after 11 months without a trial. The offensive language in Congress’ bill will freeze the assets of Russian officials connected to his death and restrict their travel to the U.S.
The Duma, Russia’s parliament, says it will respond in kind by imposing sanctions on American officials for human rights violations.
“It’s amazing that a country that created secret prisons on the territory of other countries where people are being tortured like in Dark Ages is lecturing others,” one Russian legislator said.
Before the ractopamine ban became public, we asked Yevgeniy Khorisko, the Russian Embassy’s spokesperson, if ranchers in Montana had anything to fear from Russia after the Magnitsky Act passed.
Only, he explained, “if the Montana ranchers are guilty of human rights violations.”
“I think we’ll be okay then,” said Errol Rice after being informed of Khorisko’s comments.
Whatever the reason, that doesn’t seem to be the case.