Russia WTO Entry Negotiations Break Off

The Associated Press
Saturday, July 15, 2006; 1:47 PM

ST. PETERSBURG, Russia -- Negotiations on Russia's admission to the World Trade Organization broke off Saturday with no agreement. Trade officials blamed the failure on an impasse over Russian barriers to U.S. beef and pork exports.

President Bush said the deal could not be reached despite high-level negotiations over the past several days because the administration believed Russia needed to offer more in trade concessions to satisfy U.S. lawmakers.

"We're tough negotiators and the reason why is because we want the agreement that we reach to be accepted by our United States Congress," Bush said.

Top trade negotiators for the two countries predicted a deal could be reached within two to three months. The United States is the only country that has yet to sign off on Russia's membership in the WTO.

Failure of the negotiations denied Russian President Vladimir Putin one of the economic prizes he had hoped to obtain as part of this year's Group of Eight summit of major industrial countries, which was being held on Russian soil for the first time.

Russia, the largest economy outside the 149-nation WTO, sees membership as a way to demonstrate how far it has come since its economic collapse in 1998.

U.S. Trade Representative Susan Schwab told reporters that "significant progress" had been made in narrowing differences in such areas as reducing the theft of American copyrighted material and in boosting sales of manufactured products. But she said a dispute over Russian trade barriers blocking the sale of American beef and pork could not be overcome.

Russian Economic and Trade Minister German Gref also blamed farm issues for the impasse. He said Russia had refused a U.S. demand for an immediate increase in imports of American beef and pork before Russia completes a review of America's food inspection system, due to be finished in October.

"Honestly, for me, this is a moment of disappointment," Gref told reporters.

Hopes for an agreement had been raised when Schwab traveled to Moscow earlier this week for intensive negotiations with Gref, talks that did not end until very early Saturday.

Schwab said the negotiations had made "incredible progress" in getting commitments from the Russians to deal with rampant piracy of American copyrighted movies, music and computer programs. Gref said the protection of intellectual property rights was no longer an issue in the talks.

Schwab denied that the Russians were linking U.S. approval of Russia's WTO bid to lucrative energy deals such as the upcoming announcement of foreign partners in developing the vast Shtokman natural gas field in the Barents Sea.

After the collapse of the trade talks, Gazprom, the state-controlled natural gas monopoly, said it would delay announcement of its foreign partners for the project.

In an interview with The Associated Press, Gazprom spokesman Sergei Kuprianov denied that the delay was linked to the failed trade talks.


AP business writer Alex Nicholson contributed to this report.

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