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Cablegate: Lead Wto Negotiator Discusses Veterinary Letters

VZCZCXYZ0000
PP RUEHWEB

DE RUEHMO #3356/01 3250348
ZNR UUUUU ZZH
P 200348Z NOV 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 0813
INFO RUEHBS/AMEMBASSY BRUSSELS PRIORITY 1990
RUEHVI/AMEMBASSY VIENNA PRIORITY 4686
RUEHGV/USMISSION GENEVA PRIORITY 5236
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEHAAA/WHITE HOUSE WASHDC PRIORITY

UNCLAS MOSCOW 003356

SENSITIVE
SIPDIS

USDA FAS FOR OCRA/KUYPERS; ONA/SALLYARDS, MURPHY;
OSTA/HAMILTON, BEAN
USDA FAS PLS PASS FSIS/JONES, DUTROW
STATE FOR EUR/RUS
COMMERCE FOR MAC (MATT EDWARDS, JAY THOMPSON, JACK BROUGHER)
STATE PLS PASS USTR (KLEIN, HAFNER)
BRUSSELSS PASS APHIS/FERNANDEZ
VIENNA PASS APHIS/TANAKA
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: EAGR ETRD ECON WTO RS
SUBJECT: LEAD WTO NEGOTIATOR DISCUSSES VETERINARY LETTERS

REF: A. MOSCOW 3181
B. MOSCOW 3175

THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR
DISTRIBUTION OUTSIDE USG CHANNELS OR FOR POSTING ON THE
INTERNET.

-------
SUMMARY
-------

1. (SBU) In a November 18 meeting with Agricultural Affairs
M-C and EconOffs, Russian Chief WTO Negotiator Maksim
Medvedkov stated that the November 2006 U.S.-Russia side
letter on meat and poultry inspections and certifications was
still in force. However, he said Russian and U.S. veterinary
and food safety experts should meet before the end of the
year to discuss divergent views about inspection commitments
made under the side letter. Medvedkov insisted that there
was no protectionist motivation behind the recent Russian
Veterinary and Phytosanitary Surveillance Service (VPSS)
letters and actions, noting that there were easier ways for
Russia to limit U.S. poultry imports if that were the
purpose. End Summary

--------------------------------------------- -
Meat Agreement and Side Letters Still in Force
--------------------------------------------- -

2. (SBU) On November 18, Agricultural Affairs M-C and
EconOffs met with Chief WTO Negotiator Medvedkov to discuss
the recent VPSS letters (reftels) questioning the reliability
of FSIS to certify that U.S. meat/poultry exports meet
Russian sanitary standards, in accordance with the terms of
the November 2006 U.S.-Russia side letter on meat/poultry
facility inspections. We shared with Medvedkov the November
10 detailed FSIS response to the recent VPSS letters, along
with an informal Russian translation of the letter,
emphasizing that certification of meat/poultry facilities for
export to Russia must continue as provided for in the
November 2006 side letter on inspections.

3. (SBU) Medvedkov responded that he was familiar with the
recent VPSS letters and the FSIS response. He said the
October 24 VPSS letter was not a unilateral Russian
withdrawal from the side letter; the VPSS lacked that
authority and was only acting within its limited mandate to
regulate food and animal safety. The GOR had taken no action
to withdraw from the November 2006 U.S.-Russia market access
agreement and side letters and there were no interagency GOR
discussions to that effect. The United States and Russia
were engaged in consultations about potential amendments to
the 2005 Meat Agreement, but those consultations were
provided for in the agreement.

-----------------------------------
VPSS and FSIS Not Seeing Eye to Eye
-----------------------------------

4. (SBU) Medvedkov said he viewed the VPSS letters as an
outline of areas where VPSS believed that FSIS was not
adhering to the terms of the inspection side letter. He said
VPSS and FSIS seemed to have fundamentally divergent views
about the nature of the certification process for U.S. meat
and poultry products. Medvedkov said that during Russian
audits of U.S. plants in the summer of 2008, VPSS had
identified instances in which they believed FSIS incorrectly
certified that previously delisted plants had fixed
deficiencies and now complied with Russian requirements. He
cited the example of a delisted plant that did not have a
wall between the slaughter and processing areas, as required
by Russian rules, but which FSIS had nonetheless certified.

5. (SBU) Medvedkov said VPSS and FSIS seemed to disagree
about whether FSIS needed to certify that U.S. exporters met
the identical standards in effect in Russia, as VPSS
asserted, or only substantially equivalent standards, as FSIS
argued. He said Russia had similar disagreements from time
to time with the EU and other major trading partners. A
continued exchange of letters would probably not lead to any
further progress. Instead, it made more sense for both
countries' veterinary and food safety experts to meet as soon
as possible to resolve these differences and come to a mutual
understanding of commitments under the side letter. He
proposed a meeting in Moscow prior to December 15, after
which the holiday season would result in delays.

--------------------------
But It,s Not Protectionism
--------------------------

6. (SBU) Medvedkov repeatedly emphasized that the recent VPSS
letters, while having an impact on U.S. meat and poultry
exports to Russia, were not driven by protectionist motives.
He noted that if that were Russia's desire, there were easier
ways to block the U.S. meat/poultry trade, such as through a
unilateral withdrawal from tariff rate quotas in the Meat
Agreement, or through the imposition of sanitary and
phytosanitary norms (SanPins), such as the proposed ban on
chlorine-treated chicken. Instead, Russia had chosen the
path of consultations with the United States. He added that
the GOR is well aware that domestic producers cannot meet all
of Russian consumers' demand for chicken.

-------
COMMENT
-------

7. (SBU) Medvedkov's assertions that the GOR and VPSS were
not engaging in protectionism rang a bit hollow, especially
in light of the frequency and tone of recent VPSS letters,
and the rejection of product for even trivial mistakes in
documentation. That said, we recommend a VPSS/FSIS meeting,
as it seems clear that VPSS will not re-list any plants until
after such consultations have taken place.
BEYRLE

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