Latvia postpones Baltic customs tariffs

RIGA - Latvia agreed to wait before slapping customs tariffs on Estonian pork and Lithuanian milk products, giving its neighboring countries two weeks to restrain its producers.

The joint work group from the three Baltic Agriculture Ministries met in Riga Sept. 30 to discuss mutual trade problems.

Latvia accused the Lithuanian dairy Zemiaitijos Pienas of dumping butter at ridiculously low prices on the Latvian market. The joint group decided the dairy has to stop dumping by Oct. 10 so that other Lithuanian dairies could keep on exporting to Latvia without paying customs tariffs.

According to the Latvian Agriculture Ministry, Lithuanians buy butter at 1.15 ($1.98) to 1.34 lats per kilogram, but Latvians can get it at 0.7 lats. Local producers couldn't compete with such low prices and filed a complaint with the Parliament.

Local pork producers also complained that the major meat processing company Rigas Miesnieks buys most pork for its sausages from Estonia. It is profitable for Rigas Miesnieks to import meat from Estonia because its Estonian parent company, Rakvere Lihakombinaat, owns a slaughterhouse.

The three Agriculture Ministries' representatives ruled Rigas Miesnieks has to start acquiring meat from local producers by Oct. 15.

Earlier, the Latvian Agriculture Ministry threatened to impose customs tariffs on Lithuanian milk products and Estonian pork, ranging from 15 to 45 percent, to protect local producers.

Estonia and Lithuania strongly opposed this initiative since the three Baltic states enjoy the advantages of a free trade agreement.

Lithuanian Vice Agriculture Minister Vytautas Grusauskas, who participated in the joint work group, said, "Each country should protect its market, but since the three states signed the agreement they should follow it. If some enterprises made a mistake we should solve this problem in a civilized way."

Vygantas Katkevicius, director of the Economics and Finance Department at the Lithuanian Agriculture Ministry, also noted that the problem is only with some enterprises, not with the whole exporting sector. Latvian dairies complained about increased export of Lithuanian milk products, but Lithuanian representatives just shrugged their shoulders.

"There will always be competition because the conditions in the Baltic countries are the same and prices are approximately the same. Our enterprises are just more aggressive. This is free competition," Katkevicius said.

Irina Pilvere, deputy state secretary at the Agriculture Ministry, seems to agree. "We don't use the opportunity. If our producers are less active, it's our problem."

Pilvere, though, said Latvia would impose tariffs to protect local producers if the Lithuanian and Estonian sides fail to fulfill the agreement by the deadlines.

These measures could be followed by counter measures that could hurt Latvian producers more.

At the Sept. 30 meeting, Lithuania and Estonia indirectly marked Latvian producers who could suffer if these countries take counter measures. Grusauskas said Latvian chocolate, champagne and confectionery producers are Lithuania's biggest competitors.

Ilmar Tupits, chancellor at the Estonian Agriculture Ministry, said "Estonian dairies are not greeting Latvian competitors with a smile."