11/10: WTO Deal Confirmed by US & Russia; US ELECTIONS
Russia, U.S. confirm WTO deal
Fri Nov 10, 2006 11:15 AM ET
By Elif Kaban and Doug Palmer
MOSCOW/WASHINGTON (Reuters) - Russia and the United States agreed in principle on Friday on Moscow's bid to join the World Trade Organization, marking a major breakthrough after 13 years of tortuous negotiations.
The deal paves the way for presidents Vladimir Putin and George W. Bush to sign a bilateral accord when they meet at an economic summit in Vietnam next week.
That would enable Russia to advance to the final stage of entry talks with the WTO's 149 members on a comprehensive deal to bring its $1 trillion economy -- the largest outside the trade club -- on board.
Editorial comment: Trade rules for Russia
Published: November 6 2006 02:00 | Last updated: November 6 2006 02:00
It may come as some small comfort to the World Trade Organisation, struggling without much success to put the Doha round back on its feet, that WTO membership is still regarded as a badge of international respectability. But that credibility could be undermined if Russia, the largest economy outside the WTO, is allowed to enter without making a serious effort to enforce its rules. The US, the only remaining obstacle to Russia's accession, is right to press for pledges that laws will be not just enacted but enforced.
Russia's entrance into the WTO is not before time. It has become ever more embarrassing that the Group of Eight nations, supposedly a club of rich democracies, includes a country that has yet to achieve what more than 30 of the world's 50 least-developed countries have already done.
How much real difference WTO membership will make to Russia's international trade, at least in the short run, is doubtful. No producer of oil and gas is exactly finding it difficult to hunt out international buyers for its exports, and the Kremlin, whose status as an energy exporter has given it a powerful negotiating weapon, seems to have got at least some of its way in restraining trade in financial services.
The issue that has held up membership the most is one that many trade economists say should not be in a WTO agreement at all: the protection of intellectual property rights. Russian optical disc plants continue to produce millions of DVDs that infringe thecopyright of US film studios.
The problem the US faces, even more so than with China, is not so much the law - on paper Russian copyright law is just about adequate - as its enforcement. With the high-handedness it typically shows towards inconvenient regulations, Russia's leadership has shown almost no enthusiasm for clamping down on piracy; while the number of criminal and civil counterfeiting actions has increased, the numbers convicted and fined or jailed has not. Neither the history of Soviet communism nor its subsequent status as an oligarchical oil and gas producer has made the Russian establishment particularly respectful of property rights.
These are intrinsically difficult areas in which to set quantifiable performance criteria, which is merely one of the reasons that IPR is an awkward addition to trade deals. The US cannot very well demand Russia lock up a minimum number of counterfeiters every year, though American officials have occasionally been known to gaze wistfully at the horizon about the idea.
While the presence of IPR in WTO law is a matter for controversy, now it is there it ought to be enforced, if only to preserve the credibility of the entire system. WTO membership should not be an automatic right, nor a privilege that can be extorted by energy blackmail. If Russia wants the respectability of belonging to the WTO it needs to demonstrate it can play by its rules.
END 11/6 EDITORIAL
RESUME 11/10 REPORTING
Russia, U.S. confirm WTO deal
Fri Nov 10, 2006 11:15 AM ET
By Elif Kaban and Doug Palmer
"Delegations from both sides have reached agreement on all the principles of this agreement," Russia's Economy Ministry said in a statement on its Web site.
"Both sides aim to complete the process of bringing Russia into the WTO and are ready to take more active measures to reach that goal."
The news was well flagged after officials and business leaders in Moscow told Reuters earlier there had been a breakthrough.
News overnight that Bush plans a stopover in Moscow on his way to Hanoi for the Asia-Pacific Economic Cooperation (APEC) summit, which starts on November 18, also increased expectations that a WTO deal had been clinched.
"We have an agreement in principle and are finalizing the details. We are also holding consultations with the Congress and our cleared advisers," U.S. Trade Representative Susan Schwab said in a statement issued in Washington.
"This agreement will mark an important step in Russia attaining membership in the WTO."
HOME STRETCH
Russia had hoped to announce a WTO deal with the United States at the summit of the G8 group of leading industrialized nations in St Petersburg in July but was unable to overcome the negotiating hurdles in time.
Talks between the U.S. and Russia hit trouble on the home stretch over Moscow's unwillingness to grant access to U.S. meat imports and Washington's concerns about Internet and video piracy in Russia.
Keith Rockwell, a spokesman for the WTO in Geneva, welcomed news of the breakthrough but cautioned that Russia may not make it into the club as quickly as many expect. China, he said, took 20 months to get in after completing its bilaterals.
"Don't forget that accession is a two stage process," Rockwell told Reuters.
"Even after Russia completes all its bilaterals, it must still gain consensus from the multilateral Working Party, where much work remains to be done and where some complications have arisen."
Arkady Dvorkovich, head of the Kremlin's economic staff, was more optimistic and forecast that Russia could wrap up a final entry deal within months.
"It's mutually beneficial -- it's in the interests of Russia because we receive the opportunity to operate in foreign markets, and introduce foreign countries to the Russian market on the basis of established rules," he told Reuters.
"Our foreign partners ... will be able to work in the Russian market on the basis of better known, more defined rules. We are already used to tough competition, so our companies have nothing to fear."
Accession would stimulate Russian service industries such as telecoms, banking and insurance, and "lead to a step-up in reforms by Russian companies to keep pace with the competition," said Peter Westin, chief economist at MDM-Bank in Moscow.
But the impact on trade may be more muted than was the case when China joined the WTO in 2001. Chinese manufacturers are enjoying an unprecedented export boom, while Russia is already reaping a big windfall from its oil and gas exports.
(Reporting by Douglas Busvine in Moscow and Richard Waddington in Geneva)
posted by POLYGLOT at 9:12 AM
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