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The ongoing fight between the Latvian government and Lithuanian dairy producers over dumping and market protection has escalated into a full-scale political issue.
Lithuanian President Valdus Adamkus and Latvian President Vaira-Vike Freiberga discussed the row during a summit of the three Baltic presidents and the Polish president on March 22, according to Adamkus' spokeswoman Violeta Gaizauskaite.
Lithuanian dairy companies have faced obstacles on the Latvian market since late 2001, when Latvian producers accused Lithuanian firms of dumping milk at far below market prices. An official investigation began in early January.
Lithuanian exporters and producers have, in turn, charged Latvia with protectionist measures and unusually stringent health checks on Lithuanian exports.
In March, Latvia's Food and Veterinary Service tightened quality standards on products imported into Latvia by the Lithuanian retail chain Vilniaus Prekyba.
Ignas Staskevicius, Vilniaus Prekyba's director general, told Lithuanian TV that Latvia's crackdown was linked with competition between Latvian and Lithuanian dairies.
"Only Lithuanian products are checked in this way," he said.
The situation flared even further following a March 21 statement by Latvian Economy Minister Aigars Kalvitis that hinted that Latvia would take "counter measures" against Lithuanian imports to protect local producers.
Kalvitis said that imported milk from Lithuania was cheaper to buy in Latvia than locally produced milk.
Vike-Freiberga told Adamkus that the "counter measures" were related to Latvia's efforts to generally tighten food imports.
Adamkus said in response that Lithuanian dairy exports were certified by the European Union and imported to EU member countries with no obstacles. Vike-Freiberga vowed to personally look into the situation.
According to Donatas Jonauskas, head of the Lithuanian Border and Transport State Veterinary Service, Latvia violated a free trade agreement when it held Lithuanian dairy products at the border in early March for more than a routine inspection.
The dairy products were held for five days, they passed their expiration dates and were deemed unfit to be brought into Latvia.
"Lithuania exports the same milk products to Germany, France, United Kingdom and the Netherlands," Jonauskas told The Baltic Times. "We haven't had any such problems before."
Lithuanian producers have exported about 2,000 tons of dairy products so far this year. About 610 tons were exported in march. Latvian dairy exports to Lithuania are far less.
Margers Ravas, president of the Latvian Dairy Association, told the newspaper Verslo Zinios that Lithuanian milk imports are 5 percent to 15 percent cheaper than locally made Latvian milk.
Gintautas Cereska of the veterinary sanitary department of Lithuania's State Food and Veterinary Service, told Verslo Zinios that according to regulations approved in 1999, exported products have to satisfy the requirements of the exporting countries.
But he went on to say that Lithuania allows a higher amount of microorganisms than Latvia does.
Lithuania has raised quality standards to meet the Latvian demands, he said.