Risks to the agri-food sector of Republic of Moldova associated with restrictions imposed by Russian Federation on Moldovan imports

Abstract

After Republic of Moldova has declared its firm decision to sign the Association Agreement with the European Union, Russia has tightened Moldovan products’ access on its market. It has imposed a series of bans on Moldovan agri-food imports starting with the end of last year – wines (September 2013), pork meat (April 2014), fresh and canned fruits and vegetables (July 2014), all kinds of meat (October 2014). On July 31, a resolution on the introduction of import duties in respect of imported products whose country of origin is the Republic of Moldova, especially beef, pork, chicken, vegetables, some fruits, cereals, sugar, wine grapes, alcohol, and furniture has been adopted. This situation increases tension among domestic farmers and food producers and sparks concerns among decision makers, due to the high concentration of some of these products on the Russian market. The present paper aims to offer: an alternative vision on the effects these measures may have on different segments of the Moldovan agri-food sector; some attempts to estimate losses in revenue from exports in the most exposed to risk sectors. Some recommendations of measure to overcome the possible negative effects have been formulated. Despite the existence of trade preferential regime between CIS countries since the early 90s of the past century, nontariff barriers remain to be a major impediment to trade among them. Particularly severe are trade embargoes applied by Russia Federation. Although, the experience showed that some of these measures have strong negative impact, other effects appear to be sometimes overstated. This does motivate Russian authorities to use them as a leverage to solve non-economic disagreements, maintaining the dependence of the country and hindering its initiative to promote proper policies to develop its national competitiveness.