By Tanya Silverman
Wine cellars in Moldova. Photo by Serhio.
While the former Russian chief sanitary inspector, Gennady Onishchenko, cited safety standards as the reason for these decisions, many have interpreted the import bans as blatantly politically motivated retaliation for the states’ pro-Western actions. Lithuania holds the current presidency of the European Union. At the end of November, Lithuania – which was the first nation to declare independence from the Soviet Union – plans to hold a summit aimed to strengthen ties between the EU and Moldova, Ukraine, and Georgia.
“Russia banned Georgian wines in 2006 right when political tensions between the countries started to grow; when Moldova announced its intention to sign the cooperation treaty with the EU, Russia banned the imports of its wine,” he tells BTR.
The Georgian wine ban was lifted on June 15th of this year – Russia has subsequently become its top importer. Nevertheless, the day after Russia announced that they were going to ban Lithuanian dairy, authorities also decided that they would implement stricter testing on Georgian wine.
Political interests also tie into larger trade blocs: Russia, Kazakhstan, and Belarus formed a Customs Union in 2010 as a Eurasian economic unit to counter the EU. A common market with Russia as its hub, Moscow has been pushing for additional post-Soviet states to join, including Armenia, Moldova, Georgia, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, and Ukraine.
Reactions to the Customs Union have been mixed, as former Soviet countries often find themselves under pressure for choosing whether to align with the EU or the Customs Union. Armenia was strengthening its trading ties with the EU for years, but such progress stopped in September when Armenian President Serzh Sargsyan said that his country will join the Customs Union. Ukrainian officials announced that their country will not give in to Moscow’s pressures to back out of the EU trade agreements – Russian President Vladimir Putin has threatened to retaliate with “protective measures” if Ukraine ends up signing the EU pact in Lithuania.
Yanni Kotsonis, Associate Professor of History, Russian & Slavic Studies at NYU, offers some historical background on the current events. He explains that Russia is traditionally an “empire expanded”, both during its Imperial era and then with the USSR. The Soviets had integrated states “not so much by making their economic system appealing but usually by occupying countries.”
Even through today, Kotsonis says that Russian officials “tend to look at these things as zero-sum gains… a gain for themselves is a punishment for somebody else and vice versa.”
He explains the approach as an “antiquated understanding of how Russia can flex its muscles internationally,” so from their perspective ”exercising influence over a neighboring country often comes down to [Russia] having direct, almost coercive power over them.”
Through today, countries like Armenia and Moldova are subject to fall under command of powers like Russia because of their economic and political circumstances.
“Armenia is particularly vulnerable, because they are in a state of almost constant war with Azerbaijan,” he says. In addition, Armenia has historically poor – and often hostile – relations with neighboring Turkey, which creates a situation where Russia could provide them with security.
Russia does have its consumer market to offer to other countries, Kotsonis explains, for things like Moldovan wine and Lithuanian dairy — and in return, export oil and oil products. However, unlike the EU, Russia does not invite other nations “into an economic system, which will enrich them and make them stable and prosperous,” but rather, they “try to induce countries to carry out certain policies having to do with economics and with security and they do it by forcing them into situations.”
He contrasts Russia’s appeal to that of the European Union, which offers prospects like integration, improved living standards, infrastructure and wealthy markets. Kotsonis uses the example of how Poland joined the EU in full force and has seen remarkable progress “in terms of infrastructure and economic growth” from working with Germany.
“In the long term, with any of these countries, it’s not clear why any of them would want to remain within the Russian orbit,” says Kotsonis. “It’s a relatively closed economy, and it’s a relatively poor economy when you put it up against the European Union.”
Aside from international trading blocs, another question is what kind of effect the import bans have on the countries that export their products to Russia.
Before the announcement of the Lithuanian dairy ban, Arturas Rozenas says Russia purchased 30 to 40 percent of the Lithuanian dairy exports. He explains, however, that exporters realize Russia is a “high-risk high-return market,” and that they have likely calculated the unreliability associated with such a system. Though some “short- or medium-term effects on the individual exporters” may occur, Rozenas does not believe the Lithuanian dairy ban will severely affect the country’s economy.
“The biggest loss will be incurred on the Russian consumers who have grown to like Lithuanian dairy, especially cheese,” he tells BTR. “The supply of high-quality dairy products is scarce inside of Russia.”
So even without the Russian option, Lithuanian dairy producers have the opportunity of entering and establishing themselves into new, less volatile markets.