On May 6 Latvia's government introduced higher tariffs on pork imports to protect local producers, who are claiming significant losses as a result of cheap imports.
"I don't hold this as an ideal solution, but we are forced to take these steps because there is sufficient evidence of a crisis situation," Economy Minister Juris Lujans said at the time.
Estonia, which has become one of the biggest sources of pork deliveries to Latvia, was alarmed by the news.
Kristi Liiva, head of the Estonian government's press office, told the Baltic News Service that the country would only accept measures that abided by the Baltic countries' free trade agreement and World Trade Organization rules.
"If the Latvian Parliament endorses the respective measures with no due respect to Estonian interests, Estonia will be entitled to take equal measures against Latvian export," said Liiva.
No stranger to protectionism and pork, just last week the Estonian government signed into law a series of increased duties on Polish pork. (See story on Page 8.)
Though Estonia had opted to direct its protective measures against only one type of pork, sources said there was a bill in the pipeline to raise tariffs on pork imported from all countries, not just Poland, for a period of 200 days.
In Latvia, a joint proposal by the Agriculture and Economy ministries, as well as Latvia's hog breeders' association, planned to cap imports at 6,200 tons of pork and 408 tons of pork offal.
All imports over this ceiling, according to the proposal, would be subject to a 0.25 lat (0.41 euro) duty.
The caps were established by subtracting from consumption the volume that Latvia's pork producers are unable to meet.
According to an Economy Ministry report, 53 percent of all meat produced in Latvia in 2001 consisted of pork - or 31,600 tons. Compared with 1995, pork production in Latvia has fallen nearly 50 percent, sparking serious concerns about the industry's future.
According to the Baltic News Service, Liiva said Latvian Prime Minster Einars Repse had promised Estonian Prime Minister Juhan Parts at a meeting on May 16 that the two countries would continue consultations on the matter.
Repse said that the joint trade committee would have to find a solution that could satisfy both sides.
Earlier this year Latvia's Domestic Market Protection Bureau recommended that the government place duties on imports of Lithuanian milk, which a bureau study had found was being dumped on the Latvian market.
Lithuania responded by threatening to increase duties on Latvian sausage.
Eventually the Latvian government decided not to act on the bureau's recommendations.