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A free trade agreement (FTA) between Russia, Belarus and Kazakhstan will bring trade benefits for the European dairy industry, but it could bring also lead to possible disruptions due to a variance in export certificates between the countries, according to DairyReporter.com citing the European Dairy Association (EDA).

Earlier this month, New Zealand trade minister Tim Groser and Elvira Nabiullina, the Russian economic development and trade minister announced that full FTA negotiations with New Zealand, Russia and its Custom Union (CU) partners, Belarus and Kazakhstan are to begin in early 2011.

The announcement, which was made at the APEC trade summit in Japan, follows the successful conclusion of preliminary FTA scoping discussions between the four countries, which started in May 2010.

Benedicte Masure, director of trade & economic policies of the EDA told DairyReporter.com that once the CU operates properly, European dairy products, once imported in one of the three countries, will be entitled to circulate in all three.

One of the EDA’s main concerns is that there may be problems with the veterinary export certificates. This is because the CU health certificate differs from the one agreed between Russia and the EU.

As of July 2010, in accordance with the most recently accepted documents, Russia, Belarus and Kazakhstan formally created a joint customs area, within which the majority of goods exchange are subject to the principles of free trade.

The partner countries have introduced a uniform customs tariff for the import of goods, as well as a joint customs code, which regulates the procedures applied to the import and export of goods on the CU’s territory.

Meanwhile, New Zealand-based dairy giant Fonterra said that potential agreement between the three countries could make the region an even more important partner for the New Zealand dairy industry.

“New Zealand dairy producers have a long history of supplying Russia with high quality food products. Building on these foundations, Russia has the potential to become an even more important market for the New Zealand dairy industry and for Fonterra,” said Kelvin Wickham, Fonterra group director of Supplier & External Relations.

Russia is one of the world’s largest market for imports of butter and cheese and a significant dairy export market for New Zealand. New Zealand dairy exports to Russia, mostly butter and cheese, were last year worth around $120 million. — DairyReporter.com

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