Page 67 - bneMag Dec22

bne December 2022 Eastern Europe I 67
August 1, Ukraine has exported 11mn tonnes of agricultural products to over 38 countries.
With the agreement stabilising global food security and bringing in important revenue for Ukraine, the Ukrainian government is keen to extend the deal for a year and open up two more ports; Mykolaiv and Olvia.
"The world market does not have the ability to replace Ukrainian foodstuffs
in the near future. At the same time, it is possible to increase the volume of our food for the world," Ukrainian Infrastructure Minister Oleksandr Kubrakov said.
Tensions flared after Russia warned it wouldn’t extend the deal last month and accused the European Union of hogging grain instead of fairly distributing exports to the Global South. Moreover, Russian Foreign Minister Sergey Lavrov also said that the US and Europe have mostly failed to free Russian food and fertiliser exports from sanctions, despite these being part of the agreement.
However, sources close to the talks told the Financial Times that an agreement had been reached, allowing Russia to get paid for its own exports of fertilisers and other agricultural exports and that an important pipeline carrying ammonia from Russia to Western Europe has been reopened. Therefore experts believed Russia would likely extend the initiative.
"The United Nations is also fully committed to removing the remaining obstacles to exporting food and fertilisers from the Russian Federation," Guterres confirmed.
The news will come as a big relief to the global community and stave off threats of another food crisis for the time being. Chicago wheat futures prices jumped
by nearly 6% and corn futures by nearly 3% after Russia initially suspended the deal in October following a drone attack on its Black Sea fleet.
"The Black Sea Grain Initiative continues to demonstrate the importance of discreet diplomacy in the context of finding multilateral solutions," Guterres said.
US revokes Russia’s market economy status
bne IntelIiNews
The US has revoked its recognition of Russia as a market economy, the US Commerce Department said on November 10, which will see import duties on Russian goods across the board rise.
The US Commerce Department determines the dumping margin, or the extent to which the product is being sold at less than fair value., by comparing the export prices with those in the exporting country as a benchmark, if that country has a market economy. But if the exporting country is deemed to be “non-market”, then the Commerce Department is free to use the prices of the product in any country in the world as a comparison; in effect it can use the highest prices in the world as a comparative benchmark and set the import duties on Russia goods accordingly.
The US recognised Russia as a market economy in 2002 after years of lobbying. Previously the US refused to recognise Russia as a market economy, arguing that state subsidies in the form of access to cheap energy gave all Russian goods an unfair competitive advantage, therefore justifying higher import tariffs on Russian goods.
At the same time, the US blocked Russia’s entry into the World Trade Organisation (WTO) for 14 years due to similar objections. Russia finally acceded to the WTO in 2012 and was in the process of opening up its markets to imports when it annexed Crimea a year later and imposed counter- sanctions on the EU agricultural products as part of a tit-for-tat sanctions regime, effectively abandoning the WTO trade rules in the process.
The reversion back to non-market status is the latest in a string of sanctions and other economic punishments on Russia since its invasion of Ukraine at the end of February that has run to nine packages of sanctions.
The Commerce Department said there was "extensive" government involvement in the Russian economy that has once again given its companies an unfair cost advantage over market-based economies and it doubts Russian companies are fairly pricing imports into the US, Reuters reports.
"This decision gives the United States the ability to apply the full force of the US anti-dumping law to address the market distortions caused by increasing interference from the Russian government in their economy," the Commerce Department said in a statement as cited by Reuters.
In a related move, the US has been calling for Russia’s expulsion from the WTO, while Moscow could in theory object to the US decision to remove its market status.
The American Chamber of Commerce in Russia also warned the same day that Moscow is likely to challenge any efforts to strip Russia of its WTO membership in the WTO appeals process.
The US Commerce Department launched an investigation into Russia’s status as a market economy. “If the decision, in the end, turns out to be unfavourable for Russia, it can challenge it in the WTO,” the American Chamber of Commerce in Russia said.
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