US, Russia trade pact paves way for WTO

HANOI—Russia and the United States signed a bilateral deal on Sunday for Moscow’s entry in the World Trade Organization, removing the last major obstacle in Russia’s 13-year-old bid to join the global trade body.
The agreement was signed by Russia’s Economy Minister German Gref and U.S. Trade Representative Susan Schwab on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Hanoi.
The signing was timed to take place before a meeting between Russian President Vladimir Putin and U.S.President George W. Bush, who both took part in the APEC summit, on Sunday. “Undoubtedly, this agreement is a very substantial milestone in the full integration of Russia into the global economy,” Gref told reporters after the signing ceremony.
Russia, the last major economy outside the 149-member trade body, would benefit from a “significant increase” in global trade after joining the world trade body, Schwab said. U.S. business groups have welcomed the pact, which officials said removes long-standing Russian obstacles to U.S. beef, pork and poultry exports and required Moscow to cut tariffs on a long list of agricultural and manufactured goods.
Russia has also agreed to open up its services sector and to combat piracy and counterfeiting of foreign goods. Gref told reporters on Saturday personal contacts between Putin and Bush played a key role in speeding up the deal, the last and most difficult in a string of 56 similar agreements signed by Russia in the past six years. “The next stage, multilateral talks, normally takes 6-8 months,” Gref said. “We would want to finalize the whole process by mid-2007,” he said. Bush said after his summit with Putin that the agreement “will be good for the United States and good for Russia.”
The U.S.-Russia deal could yet face a rough ride from the Democrat-led U.S. Congress, although lawmakers do not have the power to block Russia’s accession to the WTO. Schwab said granting permanent normal trade relations to Russia would be key for U.S. businesses eyeing the country.
“The full integration of Russia into the global economy is in the interests of Russia. It is also in the interests of the United States,” she told reporters. Gref said on Saturday delays in U.S. ratification of Russia’s WTO entry could upset bilateral ties but would not slow Russian accession.
Some Russian analysts have speculated that Bush, who needs a strong political boost after the Republican defeat in the mid-term polls, pushed for a WTO deal with Russia in the hope of getting Putin’s support on issues like Iran or Iraq. Gref denied any link. “The basic issues were agreed before the U.S. elections,” he said. “I cannot recall any specific event that has made our WTO talks easier”.The US leader also told Putin that Washington had lifted sanctions imposed on Russian military aircraft maker Sukhoi for providing weapons-related material to Iran, Russian Foreign Minister Sergei Lavrov told reporters. The US-Russian bilateral deal must now be ratified by legislatures in both countries, and Russia must also strike an overall multilateral accord with the whole WTO.
Gref said that could take another seven to eight months. Particular attention in the multilateral talks would be paid to Russia’s ability to protect intellectual property rights, Schwab and Gref said. The US-Russian deal had been repeatedly delayed amid mutual accusations that bilateral economic issues were being used as political leverage over unconnected disputes.
Despite Sunday’s signing ceremony, bumps in Russia’s road to WTO accession remain. Besides completing multilateral talks, Russia may also have to overcome a bitter standoff with WTO member Georgia, which has threatened to withdraw an earlier agreement in retaliation for Russian economic sanctions.
The election victory by US Democrats earlier this month, which handed them control of Congress, could also complicate matters, as Russia’s controversial record on political freedom and civil rights comes under scrutiny. US business groups are urging Congress to move swiftly on granting Russia “Permanent Normal Trade Relations” (PNTR) status and to abolish Cold War-era limits imposed on commerce with the former Soviet Union. —Agencies