Russia follows through, shuts out West's food

Battles rage in east Ukraine

Special forces police battalion officers detain an activist during a clash in Independence Square in Kiev, Ukraine, on Thursday, Aug. 7, 2014.  The unrest had started earlier Thursday, after the Kiev authorities attempt to dismantle some of the barricades. Activists confronted city workers attempting to clear a central square, lighting tires on fire in protest against the city government's move.
Special forces police battalion officers detain an activist during a clash in Independence Square in Kiev, Ukraine, on Thursday, Aug. 7, 2014. The unrest had started earlier Thursday, after the Kiev authorities attempt to dismantle some of the barricades. Activists confronted city workers attempting to clear a central square, lighting tires on fire in protest against the city government's move.

MOSCOW -- Russia struck back at U.S. and European Union sanctions with a ban on a range of food Thursday as Ukrainian troops pressed the attack on pro-Russia rebels in a bid to drive them out of their last strongholds in eastern Ukraine.

Prime Minister Dmitry Medvedev announced Thursday that Russia was immediately banning all beef, pork, fruit, vegetables and dairy products from the European Union, the United States, Canada, Australia and Norway for one year. The move had been ordered by President Vladimir Putin on Wednesday.

"We hoped until the very last that our foreign colleagues would realize that sanctions are a dead end and that nobody needs them," Medvedev said. "Things have turned out in such a way that we have to implement retaliatory measures."

The move will leave a $9.5 billion hole for domestic companies and producers from developing nations such as Brazil to fill.

Lithuania, a former Soviet republic that's now a member of the EU and NATO, stands to suffer the most from the Russian sanctions, according to Capital Economics Ltd. Lithuanian exports of products to Russia that are now banned accounted for 2.5 percent of gross domestic product last year, Capital Economics economists led by Neil Shearing said by email.

"By seeking revenge against the West, the Kremlin's decisions will hurt the people of Russia," Lithuanian President Dalia Grybauskaite said on Lithuania's LRT radio Thursday.

Denmark, another EU member, exported about $628 million of now-banned products to Russia last year, according to the Danish Agriculture & Food Council.

Russian officials said countries including Argentina, Brazil, Iran, Israel, Morocco, Paraguay, Turkey, Uruguay and former Soviet states not in the EU can boost food exports to help fill the void.

"The decision on retaliation wasn't easy for us," said Medvedev, who also announced a ban on Ukrainian airlines flying over Russia and a possible review of Siberian airspace use by other carriers. Russia may also introduce "supportive measures" for the car, shipping and aerospace industries, Medvedev told ministers at a meeting in Moscow.

Putin is facing increasing isolation over the rebellion in Ukraine, which ignited when he annexed Crimea in March after a referendum on the Black Sea peninsula that the United Nations rejected by a vote of 100 to 11. More than four months of fighting has killed almost 1,400 people and displaced hundreds of thousands more, according to United Nations estimates.

The EU said it "regrets" the bans and may respond.

"We reserve the right to take action as appropriate," European Commission spokesman Frederic Vincent said in Brussels.

While the ban will harm some countries, "it will likely only amplify the effects of financial and sectoral sanctions imposed on Russia," Dmitry Polevoy, an economist at ING Groep NV in Moscow, said in an emailed note. "This will likely add to overall sanction costs via higher food inflation and so will have a widespread effect on households."

Washington officials dismissed Moscow's ban as trivial to the U.S. but destructive to Russia's own population.

With the inclusion of Ukraine, most of whose food products also have been banned, Russia has now cut off 55 percent of its agricultural imports, including about 95 percent of its imported milk, cheese and yogurt.

"What the Russians have done here is limit the Russian people's access to food," said David Cohen, the U.S. Treasury undersecretary in charge of economic sanctions. He said the U.S. is ready to impose more sanctions against Russia if it doesn't de-escalate the conflict in Ukraine.

The damage to consumers is expected to be particularly great in big cities like Moscow, where imported food fills an estimated 60 percent to 70 percent of the market. But some customers said they were not worried.

"And so what? Instead of Spanish fruit we'll have, I don't know, fruit from Israel. It doesn't bother me," said Irina Ivanova, who was shopping at an upscale grocery store in Moscow.

Fighting in the east

As Western officials weighed the effect of the food curbs, fighting raged around Donetsk and Luhansk in Ukraine's mainly Russian-speaking easternmost regions, according to the government in Kiev.

NATO Secretary-General Anders Fogh Rasmussen, in Kiev for talks with President Petro Poroshenko, warned Putin to "step back from the border" and pledged to provide assistance to Ukraine.

The U.S. and the European Union have accused Russia of supplying arms and expertise to a pro-Moscow insurgency in eastern Ukraine and have responded by slapping sanctions on Russian individuals and companies.

Tensions rose further last month when a Malaysian jetliner was shot down over rebel-held territory, killing all 298 people aboard, and the West accused Russia of most likely providing the militants with the missiles that may have been used to bring the plane down.

"In response to Russia's aggression, NATO is working even more closely with Ukraine to reform its armed forces and defense institutions," Rasmussen said.

The government in Kiev estimates that Russia has deployed 45,000 soldiers, 160 tanks and 192 warplanes among other equipment along its border, including soldiers stationed in Crimea. NATO said there's a threat of Russian troops crossing the border under the "pretext" of a humanitarian mission.

Russia, which denies any role in the Ukrainian conflict, remains at odds with the U.S. and its allies over events on the ground in Ukraine. The U.S. joined NATO and Poland in warning about the risk of Russia sending troops into its neighbor. Russia called reports of a military buildup on its western border "groundless."

The threat of incursion is a "reality," U.S. Defense Secretary Chuck Hagel said.

Meanwhile, fighting between separatists and Ukrainian troops continued in the city of Donetsk, where tens of thousands of the city's 1 million people have fled as civilian deaths, power cuts and water shortages increase.

In Donetsk, sustained shelling struck residential buildings and a hospital, killing at least four people and wounding 10 others, local officials said.

Mortar fire struck Vishnevskiy Hospital on Thursday morning, killing one and wounding five others, Donetsk City Council spokesman Maxim Rovensky said.

"There was a sudden explosion," said Dr. Anna Kravtsova, who works at the hospital. "A mortar round flew through the window."

The shelling, which destroyed an array of equipment in the dentistry unit, also hit three nearby apartment buildings.

It followed a night of shelling in another neighborhood as the fighting between the government and pro-Russia separatists inches ever closer to the city center. The mayor's office said in a statement posted on its website that three people had been killed, five wounded and several residential buildings destroyed during those attacks.

The government denies it uses artillery against residential areas, but that claim has come under substantial strain in the face of mounting evidence to the contrary.

Hours before Rasmussen's arrival, clashes broke out in central Kiev as city authorities sought to clear away the remnants of a tent colony erected by demonstrators involved in the street uprising against former pro-Russia President Viktor Yanukovych. At the time, protesters were angry about endemic corruption and wanted closer ties with the European Union.

In scenes reminiscent of that revolt, which climaxed with Yanukovych's ouster in February, demonstrators set alight tires in their face-off against a volunteer battalion overseeing the cleanup operation.

Fifty policeman were injured and 10 protesters were detained, Interfax reported, citing an Interior Ministry official.

Also Thursday, Andriy Parubiy, head of Ukraine's National Security and Defense Council, resigned, his spokesman confirmed by phone, without giving a reason for his exit.

Information for this article was contributed by Olga Tanas and Daria Marchak of Bloomberg News; by Vladimir Isachenkov, Laura Mills, Lynn Berry, Juergen Baetz, Lori Hinnant, Toby Sterling, Karl Ritter, Josh Lederman, Peter Leonard, Yuras Karmanau and Juergen Baetz of The Associated Press; and by Neil MacFahrquhar, Alison Smale, James Kanter, Maia de la Baume, Jack Ewing, Joanna Berendt, Stephanie Strom Christopher F. Schuetze and Katarina Johannsen of The New York Times.

A Section on 08/08/2014

Upcoming Events