Source Pravda.Ru

Denmark to Learn the Price to Pay

This is the price Denmark will pay for crossing Russia
Under the extreme concern of the Russian authorities about the increasing amount of imported goods, the government at the same time realizes perfectly well the position of a large importer brings considerable advantages, political advantages as well. Let’s remember the small, successful Denmark, which proudly refused to extradite the official political emissary of the Chechen terrorist leader Maskhadov, Ahmed Zakayev, to Russia. Russian news agency RIA Novosti reports with reference to the Danish newspaper Politiken that Denmark appealed to the European Commission for help if Danish exports to Russia were reduced.

Danish Foreign Minister Per Stig Moeller sent a letter with tan appeal to the EU Commissioner for trade and agriculture on November 28 already, six days before the official decision not to extradite Ahmed Zakayev to Russia. Proud and adhering to principles, the Danes did it to be on the safe side. However, will the appeal to the European Commission help Denmark’s producers of Ecco shoes, Derby refrigerators, Tuborg and Carlsberg beer, and other goods that are so far in a rather stable demand on the Russian retail market?

Denmark’s mass media think that issue of Denmark’s exports to Russia may become especially urgent nowadays. Until now, Russia just allowed loud and empty statements of its politicians and vague threats from the corporate lobbyists, the Russian Union of Businessmen and Industrialists and the RF Chamber of Industry and Commerce. Some time ago, the Russian Foreign Ministry made haste to declare that the situation with the extradition of terrorist Ahmed Zakayev would have no effect on Russia-Denmark commercial and economic relations. Although obvious difficulties in the mutual commodity turnover appeared almost immediately. Otherwise, first deputy of the State Customs Committee of Russia Leonid Lozbenko wouldn’t refute the reports of several Russian mass media saying that the customs banned access of Danish goods to Russia. However, he did refute the reports on November 26. With reference to official documents, Leonid Lozbenko stressed that “there were no delays with customs clearing of Danish goods delivered to Russia.” He said that the average time to clear Danish goods made up two days, while the law allows a period of ten days. However, the refutations didn’t deceive anyone at all. Britain’s Financial Times foretold that Copenhagen’s decision not to extradite terrorist Zakayev to Russia would undoubtedly harm business relations between the two countries. Several Danish businessmen working in Moscow told the newspaper that their companies had already undergone bureaucratic checks held by the Russian authorities. And it’s clear that this is just the beginning.

NEWS.ru reports that as soon as the Russian party “United Russia” called upon the Russian people to boycott Danish goods, it already became evident that Danish companies would experience difficulties in Russia. “United Russia” urged people: “Each Russian must give up travels to Denmark, Danish goods, and contacts with Denmark companies.” By the way, no boycott has been registered yet in Russia toward Danish goods. At least, there are still crowds of Russians near the Danish mobile snack-bars Top-Stop. And this is despite the fact that there are already lots of Russian fast-food cafes with cheaper domestic food in Moscow.

PRAVDA.Ru has reported on the possible mutual losses caused by reduction of commercial and economic relations between Russia and Denmark. As it turned out, Russia’s losses in this case will be not less than those of Denmark. There are several solutions for the substitution of Danish exports in Russia; however, some share of Denmark’s exports to Russia is of an obviously exclusive character. In addition, Danish goods belong to rather high price categories, where there are just few products of Russian origin. It means that if Danish goods disappear from the Russian market, they can be substituted only with similar goods imported from other European countries.

At the same time, almost all branches of Denmark’s economy are represented in Russia, including the food industry, agriculture, pharmaceutics, consulting services, construction, environmental protection, information technologies, industrial equipment, transport, etc. Imports of Danish goods increased by 2.3% in August 2002 as compared with the same year-ago period. By the way, exports of Danish goods to Russia was on a record level in August 2001: it increased by 42% within a year to 5.9 billion crown (one dollar costs approximately 7.4 crown today). Products of Danish agricultural producers (ham, bacon, beer) and in the sphere of environmental protection and energy were especially successful in Russia.

Akhtyam Akhtyrov PRAVDA.Ru

Translated by Maria Gousseva

Read the original in Russian: http://economics.pravda.ru/economics/2002/7/21/64/3884_tradeRusDen.html

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