August 22, 2014 / 12:01 PM / 3 years ago

EU tells candidate Serbia not to exploit Russian embargo

* Serbia says got message from EU

* Says will not subsidise exports to Russia

* Serbia caught between EU ambitions, Russia ties

By Aleksandar Vasovic

BELGRADE, Aug 22 (Reuters) - Serbia said on Friday it would not encourage exports to Russia, after the European Union urged the Balkan country not to exploit the Kremlin’s ban on Western food imports.

Serbian food producers hope to take advantage of the trade row to boost exports to Russia. But the West-Russia stand-off over Ukraine has put Serbian authorities in a tight spot, caught between their ambition to join the EU and historical ties with fellow Orthodox Christian Russia.

Prime Minister Aleksandar Vucic said he had received an aide-memoire this week from an EU official in Belgrade calling on Serbia to refrain from boosting exports to Russia, as a matter of solidarity with the bloc.

Vucic told a news conference Serbia had not planned to subsidise exporters to Russia but also would not join the Western sanctions on Moscow.

As a candidate for membership of the EU, Serbia is under pressure to bring its foreign policy into line with that of the 28-member EU, which wants to make sure Russia feels the cost of its own ban on Western food imports.

“We won’t stop production or exports, but we won’t introduce new subsidies either,” he said. “We will behave in line with the recommendation we received, but we will not introduce sanctions against Russia.”

“Our strategic path is the path to the EU, and because of Serbia and its citizens we must preserve good, friendly relations with Russia,” Vucic told reporters.

Some Serbian food producers, particularly fruit farmers, have reported a spike in demand from Russia, but capacity is limited.

In 2013, just 7.2 percent of Serbia’s total exports went to Russia, worth some $65 million.

Russia this month banned all meat, fish, dairy, fruit and vegetable imports from the United States, the EU, Norway, Canada and Australia for one year in retaliation against Western sanctions on Moscow.

The West accuses the Kremlin of fomenting a pro-Russian separatist insurgency in eastern Ukraine, a charge Moscow denies. (Writing by Matt Robinson; Editing by Larry King)

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