Report: U.S. Reaches World Trade Organization Deal with Russia

July 14, 2006

Russia’s finance minister said Russia and the United States had reached a deal on one of the key sticking points holding up an agreement on Russia’s accession to the World Trade Organization, and a final deal would be signed within the next two days, news agencies reported Thursday.

RIA-Novosti quoted Alexei Kudrin as saying that U.S. and Russian negotiators had reached an agreement that will allow foreign insurance companies to open branches in Russia, but not foreign banks.

“We have agreed to the opening of branches of foreign insurance companies but have insisted that no branches of foreign banks will be opened in Russia,” he was quoted as saying.

Kudrin spoke a day after U.S. Trade Representative Susan Schwab arrived in Moscow for talks with Economics Minister German Gref and other top officials.

A spokeswoman for Gref’s ministry said earlier that talks had been extended into Friday, but would not comment on whether progress had been made. The U.S. Embassy said that Schwab and Gref were “actively negotiating.”

Talks have been slowed by disagreement over rules governing access for foreign financial services firms, agricultural subsidies and Russia’s enforcement of intellectual property rights.

However, Russian newspapers reported Thursday that two big deals that could stand to benefit U.S. companies had been brought into play.

Nezavisimaya Gazeta reported that the U.S. was prepared to cave in on its demands for tougher intellectual property enforcement and drop demands that U.S. banks be allowed to open branches directly in Russia without having to go through a Russian-registered, and Russian-regulated, subsidiary.

For its part, Russia would allow foreign firms greater access to its insurance markets as well as lower agricultural subsidiaries. The paper suggested that Russia would also offer U.S. firms a role in tapping its giant Shtokman natural gas field in the Barents sea.

Gazeta, meanwhile, reported that Russia would not agree to lifting barriers to U.S. farmers or insurance companies, but as well as a part in the Shtokman project it would agree to update its commercial air fleet with U.S.-made Boeings rather than European Airbus airliners.

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