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MOSCOW/WASHINGTON - Russia and the United States have reached agreement on Moscow's bid to join the World Trade Organisation, marking a major breakthrough after 13 years of tortuous negotiations.
The agreement paves the way for 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 ($1.52 trillion) economy on board.
The breakthrough removes an irritant in the US-Russia relationship, but is likely to set off a fight in the new Democrat-controlled US Congress next year over a key provision of the deal.
It comes just a few days before Russian President Vladimir Putin and US President George W Bush meet in Moscow and again at an Asia-Pacific regional summit next week in Hanoi. US Trade Representative Susan Schwab and Russian Trade Minister German Gref are expected to sign the new pact at the summit.
"Our agreements with the United States are of a very balanced character," Gref told reporters in the Siberian city of Krasnoyarsk during a stopover on his way from Shanghai to Moscow.
"We have managed to reach compromise and understanding with our partners on all the issues of paramount importance to us," he said.
US Trade Representative Susan Schwab said the Bush administration was still consulting with members of Congress about details of the agreement in principle, but called it "a clear indication of Russia's effort to participate fully in and benefit from the rules-based global trading system."
US business groups welcomed the pact, which Schwab's office said removes longstanding Russian obstacles to US beef, pork and poultry exports and requires Moscow to cut tariffs on a long list of agricultural and manufactured goods.
Russia also agreed to open up its services sector, including in the politically-sensitive area of banking and insurance, and to take stronger action to stop piracy and counterfeiting of foreign goods before it joins the WTO.
The deal sets the stage for a potential battle in Congress next year to extend "permanent normal trade relations" to Russia by removing a Cold War provision known as the Jackson-Vanik amendment.
That legislation linked normal trade relations with communist countries to the rights of Jews and other religious minorities to emigrate. It remains on the books for Russia even though it has not been applied for years.
Democrats, who captured Congress from Republicans in elections this week, have taken a more skeptical view of trade agreements.
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.
Dan Glickman, president of the Motion Picture Association of America, said he was "cautiously optimistic" the agreement requires Russia to bring its copyright laws and enforcement system into line with WTO intellectual property rights rules.
Keith Rockwell, a spokesman for the WTO in Geneva, welcomed 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 bilateral deals.
"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," Rockwell told Reuters.
Arkady Dvorkovich, head of the Kremlin's economic staff, said Russia could wrap up a final entry deal within months.
"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 encourage reforms by Russian companies, said Peter Westin, chief economist at MDM-Bank in Moscow.
- REUTERS
