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RUSSIA, EU AGREE ON WTO-MEMBERSHIP TERMS.
MOSCOW. (RIA Novosti commentator Raisa Zubova)
Moscow hosted the thirteenth Russia-EU summit late last week, which saw the sides sign a protocol on completing their talks on Russia's accession to the World Trade Organisation (WTO). Only six months ago this seemed almost impossible because Moscow and Brussels had huge differences, while the energy problem seemed insurmountable.
At that time, the EU was demanding that Russia abolish Gazprom's export monopoly and that it stipulate equal gas-transit rates for domestic and foreign producers via Russian territory. EU Trade Commissioner Pascal Lamy and Russia's Economic Development and Trade Minister German Gref exchanged tough statements. Russian President Vladimir Putin also exchanged pleasantries with Brussels, saying the EU position amounted to "arm-twisting" and let it be understood that Russia intended to retain control over Gazprom and the gas pipeline network.
Putin's demarche set the ball rolling, a senior official in the Russian government believes. The EU modified its negotiating position, after Putin called our partners "Euro-bureaucrats", who were preventing Russia from developing its market economy.
Experts also proved instrumental in facilitating Russia-EU talks on WTO-membership terms. When the talks all but became deadlocked last autumn, leading Russian and EU experts were called in to rectify the situation. They found a common language. The government source says that the Russian experts enabled their European colleagues to gain a better understanding of the situation, explaining the essence of Gazprom and Russia's fuel and energy network. They also explained why the state was so far reluctant to strip Gazprom of its export monopoly.
The aforementioned protocol merely formalises Russia's legally binding fuel and energy commitment. The government undertakes to create a favourable gas market, enabling producers to cover their expenses and make profits. However, this commitment does not deal with gas sales to the population and social-infrastructure facilities.
The Russian government also voiced some intentions in the gas sphere; for instance, domestic gas prices will reach $37-42 per every 1,000 cubic metres by 2006 and hit $49-52 by 2010. The government said that it had no intention of creating unnecessary obstacles impeding the construction of new gas transport facilities. Russia is ready to abide by its WTO commitments as regards the freedom of gas transits. Still Moscow believes this principle does not apply to gas pipelines, and that all pipeline issues should be settled in line with a special agreement. Talks on this issue are already being planned.
Moscow also managed to defend its positions on other important issues. The protocol stipulates the stage-by-stage liberalisation of Russia's export duties over a transitional period of two to three and up to seven years depending on the commodity categories. Export duties will then decline by a small margin - from 10.3% to about 8%. Moscow also defended its interests in such areas as the aircraft industry and the automotive industry; sectoral tariffs are to be just under their current level. Quotas will be introduced in the agro-industrial sector and during the admission of foreign financial institutions to the Russian market, but no direct subsidiaries of foreign loan agencies will operate in Russia.
The signing of the latest Russia-EU protocol is a tremendous success for Russia, which will facilitate Moscow's talks with the United States, Japan and China, members of the Russian government claim. Any country's negotiating positions are directly proportional to its commercial interests. Russia saw the EU as a heavyweight because it accounts for 55% of the country's foreign-trade turnover.
Russian-Japanese talks are also nearing completion, the senior source noted. The automotive industry is seen as the main issue by both countries. For its own part, the United States is concerned over the Russian aircraft industry's duties and free access to the Russian intellectual-property market, while China is fighting for textiles, footwear, furniture and some feedstock categories. But, most importantly, it wants to gain free access to the Russian labour market.
WTO regulations state expressly that any new country can only be admitted by consensus. This means that two-thirds of all WTO members should vote in Moscow's favour. In reality, though, the most important thing is to secure the agreement of the world's trade leaders. Therefore, one can say that the Russia-EU agreement is a giant step toward attaining this goal. So, as the government source predicted, one can expect that Russia will join the WTO in either 2005 or 2006.
ZURICH (Reuters) - The United States and Russia could strike a deal this year on Moscow's accession to the World Trade Organization (WTO), after making "excellent" progress in talks on Monday, the top U.S. trade negotiator said.
Russia is the largest economy still outside the 148-country trade body, and the United States and Japan are the only major powers yet to give their approval to its membership.
The talks between U.S. Trade Representative Robert Zoellick and Russia's Economy Minister German Gref, their first meeting in months, came some three weeks before President Bush and Russian President Vladimir Putin at to hold a summit, with trade high on the agenda.
"We have had an excellent meeting today," Zoellick told journalists after eight hours of talks, far longer than initially scheduled. "If we keep up this momentum, we should be able to reach our bilateral agreement ... on accession during the course of this year."
Gref was equally optimistic, saying that an agreement with the United States should clear the way for Russia's accession to be approved by the full WTO membership at a ministerial conference in Hong Kong in December.
"Once we have the negotiations with the U.S. completed ... we will have a very good window of opportunity to get things done by December," he said.
Russia, which has been negotiating to join the Geneva-based body for a decade, has already concluded bilateral deals with the European Union, South Korea and a host of other WTO members.
INDIVIDUAL ACCORD
Entry to the WTO, which sets the rules for world trade, requires an individual accord with any member that demands one, and negotiating a separate overall deal with the full WTO.
The latter aims to ensure commercial rules and regulations in a candidate country are in line with WTO practices.
Zoellick said that progress had been made on all outstanding issues, which included differences between Moscow and Washington on farm trade, industrial goods and services, particularly the banking and insurance sectors. On industrial goods, Zoellick said there remained only a "small number of issues" to resolve, including tariffs.
In banking and insurance, where the Russians were refusing to allow foreign institutions to open branch networks, the U.S. official said the two sides had moved "closer together," but he gave no details.
On farm issues, the two ministers agreed to set up a special group from their agriculture and trade ministries to tackle the differences, particularly in health regulations. "We have been able to accelerate work across all the areas," said Zoellick, who will shortly leave to take over as number two at the State Department. "Both sides have a renewed sense of energy," he added.
The two ministers said there would be another ministerial meeting in March or April, after negotiators from both sides had held a further round of talks in Geneva later this month.
