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Russia continues protectionist policies against Central Asian exporters

By Kanat Altynbayev

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A Becker & K supermarket in can be seen in this photo taken in Almaty on October 29. The company has faced administrative barriers in Russia for three years, Becker & K CEO Almaz Tubekov said. [Kanat Altynbayev]

ALMATY -- Complaints by Central Asian exporters over Russia's increasingly protectionist policies are further evidence that the Eurasian Economic Union (EEU) is beneficial only to Moscow, observers warn.

The EEU ostensibly was meant to help its member states import and export goods without obstacles, but instead, joining the EEU has brought Central Asian countries a number of economic, geopolitical and even social problems.

In one recent case, Rosselkhoznadzor, Russia's food safety watchdog, sent a letter to the Kazakh Ministry of Agriculture citing "undeclared trace DNA levels" in meat products supplied by Kazakh company Becker & K, Kazakh news website Informburo reported in September.

At a meeting with members of the Eurasian Economic Commission (EEC), the executive body of the EEU, Becker & K CEO Almaz Tubekov noted that his company is in compliance with technical regulations.

"Moreover, [the EEU] does not regulate the minimum acceptable indicators of the presence of 'traces' of foreign DNA," he said.

The issue concerns a "minuscule amount of foreign DNA in the product", Tubekov said, adding that such traces can occur merely if a supplier transports different types of meat together or if a worker's hands touches the meat in the processing plant.

The transfer can also occur through airborne droplets, he said. "This happens at the molecular level."

Becker & K has faced administrative barriers in Russia for three years, according to Tubekov. Russian authorities "with excessive strictness monitor all food coming from the EEU, both at the border and during inspections in stores".

"We perceive protectionism from Rosselkhoznadzor," he said.

It is easier to export to other countries, which have clear rules and no endless bureaucratic inspections, said Tubekov, adding that Kazakh regulatory bodies did not adopt retaliatory measures even though Russian products also violate technical regulations.

Unfair competition

The latest case is one of many involving Russian authorities' abuse of administrative levers against partners within the EEU.

In February at a news conference in Almaty, Konstantin Fedorets, CEO of leading Kazakh candy-maker Rakhat, told reporters that Russian enterprises constantly involve Rakhat in legal battles and that regulatory agencies routinely seize the company's products.

Russian competitors appeal to their friends in government for help in holding back foreign competitors, according to Fedorets.

Russian candy companies have "a very strong lobby and relationships with local authorities: ministers, the customs bureau and tax officials", he said at the time.

"Russia prefers to act from a position of strength everywhere, including in retail," he declared.

The EEU has created conditions favourable for Russian entrepreneurs, investments and goods, while competing enterprises from other member states are forced to work under harsh, unequal conditions, said Rasul Zhumaly, a former Kazakh diplomat living in Almaty and author of "Geopolitics in Central Asia."

"Russia is using non-market mechanisms and its regulatory agencies, which supposedly expose violations of health standards but actually eliminate competitors," he said.

The EEU does not actually have an economic mission but instead is Russia's political project to restore the status quo ante of having great influence in the post-Soviet space, said Zhumaly.

Top officials have criticised Russia's protectionist policies.

"Out of a desire to protect [Russian] manufacturers' positions... various inspections, additional requirements at the regional level, unspoken instructions, etc., are being introduced," said Kazakh President Kassym-Jomart Tokayev on October 1.

He made his remarks at a meeting in Yerevan of the Supreme Eurasian Economic Council, which is comprised of the heads of state of EEU member nations.

"This practice is unacceptable and contrary to the principles of our integration," said Tokayev.

Stepping up influence

Russia's latest step in attempting to maintain its influence has involved pressuring Uzbekistan to join the EEU.

Moscow, which has suffered from Western sanctions imposed after the illegal Russian annexation of Crimea, apparently sees Uzbekistan's 33 million citizens as frontier of opportunity.

Valentina Matviyenko, the chairwoman of Russia's Federation Council, during her visit to Tashkent on October 2 claimed that Uzbek President Shavkat Mirziyoyev "has made a decision and the question of Uzbekistan joining the Eurasian Economic Union is being worked out," Kremlin-controlled news website RIA Novosti reported.

"Uzbekistan's accession to the EEU will happen without delay," she claimed.

Matviyenko jumped to conclusions, Tashkent made clear.

Tashkent has not made the decision to join the EEU, Sadyk Safayev (Sodiq Safoyev), the first deputy chairman of the upper house of the Uzbek parliament, said October 4.

"Uzbekistan is not a state that can be pressured," Safayev said, adding that Uzbekistan has studied EEU membership for three years.

Central Asian officials have seen potential threats in joining the EEU and have avoided ceding control over certain policies to the union.

The Eurasian Development Bank (EDB) -- a regional development bank established by Russia and Kazakhstan -- will be a prototype for the EEU's future central bank, Andrey Belyaninov, board chairman of the EDB, said in a statement September 25.

Belyaninov's statement provoked objections from Kazakh authorities.

"Monetary and credit policy and currency regulation remain entirely within the competence of the central banks of the EEU member states," the National Bank of Kazakhstan said two days later.

"The formation of a currency union and the introduction of a single currency are not envisioned" and "the creation of a single central bank is is not envisioned or under consideration," it added.

"The EDB leadership's statements are not true and contradict agreements adopted under the EEU," it said.

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Leave it for good, end of story.

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We need to leave this taiga union that only Russia benefits from

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Both Bekker and Rakhat have been seized illegally

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Russian merchandise should be banned also.

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