* Russia bans pork imports after cutting oil supplies
* CEO's arrest after collapse of potash cartel angers Moscow
* Putin also faces dispute with Ukraine
By Timothy Heritage
MOSCOW, Aug 30 Russia banned pork imports from
Belarus on Friday, stepping up a diplomatic and trade war over
the arrest of a Russian businessman and threatening to deepen
the isolation of its former Soviet ally.
Russia is one of Belarus' few diplomatic backers after 19
years of authoritarian rule by President Alexander Lukashenko
but has responded furiously to the arrest this week of Vladislav
Baumgertner, head of Russian potash company Uralkali.
Baumgertner was seized on Monday at the airport outside the
Belarussian capital Minsk after being invited to talks with the
prime minister, and then humiliated by television footage
showing him being searched in his prison cell.
Since then, Russian officials have announced a 25 percent
drop in oil supplies to Belarus in September, threatened to
extend the cuts for several months and hinted at possible
restrictions on imports of Belarussian dairy
Russia's veterinary regulator said the restrictions on hog
and pork product imports had been imposed over concerns about
African swine fever in Belarus and would not be lifted until the
virus was wiped out or brought under control.
The moves could deal a significant blow to Belarus, a
transit country for Russian oil and natural gas to Europe. Its
economy, already in danger of collapse, is heavily reliant on
agriculture and Russian oil supplies.
"Relations between Russia and Belarus seem to be delving to
new lows and the expectation is that Russia will further ratchet
up pressure on its neighbour via the trade channel," said
Timothy Ash, an analyst at Standard Bank in London.
"All this comes as the economy in Belarus looks precariously
The dispute followed the collapse this month of a
Russia-Belarus sales cartel that controlled two-fifths of the
$20-billion global market for potash, an ingredient used in
In a sign that the breakup of the joint venture with
Uralkali is causing problems for Belarus, a senior official at
state potash producer Belaruskali said it had suspended two of
its four potash mine complexes for maintenance.
Any big fall in output at Belaruskali, which was Uralkali's
partner in the potash cartel, would have a severe impact on the
finances of Belarus, where the soil nutrient accounts for 12
percent of state revenue and about 10 percent of export income.
Russian President Vladimir Putin has said nothing in public
about the dispute but his foreign policy adviser, Yuri Ushakov,
said Moscow was counting on Belarus freeing Baumgertner quickly
and described the dispute as commercial but not political.
The Kremlin also tried to play down the political impact by
saying Putin had followed protocol by sending a telegram
congratulating Lukashenko on his 59th birthday on Friday.
Russia has denied any of the economic or trade moves this
week were connected with Baumgertner's arrest but the timing
undermines these statements.
Belarus has defied the pressure, charging Baumgertner with
abuse of his authority and threatening criminal charges against
Suleiman Kerimov, Uralkali's top shareholder and a Kremlin ally.
But Belarus, a country of less than 10 million, needs Russia
for energy and economic handouts and as a counterweight to the
European Union and the United States, which shun him because of
his treatment of opponents and lack of tolerance for dissent.
The timing is unfortunate for Putin because Russia is also
in a dispute with Ukraine, another former Soviet republic which
Moscow wants to dissuade from closer integration with the West.
Western European countries are following the situation
closely because oil supply cuts in the past to Ukraine and
Belarus have caused disruptions to pipeline flows to Europe.
Moscow says Kiev must choose between free trade with the EU
and a Russia-led customs union that also includes Belarus, and
wants control of Ukraine's gas pipeline network. But Ukrainian
President Viktor Yanukovich stood firm on Friday, saying: We
will not trade up our country - that is our principle."
Moscow is particularly sensitive to what happens in Belarus
and Ukraine because it considers them as its "near abroad", an
area where it sees Western diplomatic or economic interference
as a threat.