US set to sign Russian WTO deal before G8

MOSCOW - The United States and Russia are poised to sign a deal on the eve of the Group of Eight summit paving the way for Russia to join the World Trade Organisation, officials and diplomats said yesterday.

The White House played up hopes that Russia's decade-old bid to join the WTO could clear the last major hurdle when presidents George W. Bush and Vladimir Putin meet on Friday, the eve of the G8 summit in St Petersburg.

Russia's Itar-Tass news agency quoted Bush as telling foreign correspondents he had sent a letter to Putin setting out the US position.

"There is no lack of clarity about what should happen on the market access issue, from both sides' point of view," Bush said.

"I hope that we'll sort it out. I'm an optimist on this." A bilateral trade deal would kick-start the first G8 summit to be hosted by Russia, and help ease recent antagonism over Moscow's growing assertiveness as a strategic energy exporter.

"I hope that we will manage to successfully conclude talks with the Americans before the start of the summit," Russia's Deputy Prime Minister Alexander Zhukov told reporters.

"I wouldn't want to comment on the talks now, but they are ongoing and I hope they will conclude successfully."

US Trade Representative Susan Schwab is expected to travel to Moscow later this week to see if a WTO deal can be closed, the White House said on Monday. Schwab's office said her making the trip depended on achieving "significant progress".

A Western diplomat said: "If I was allowed to bet, I would put good money on a US-Russia bilateral deal on WTO."

The head of the American Chamber of Commerce in Russia also forecast a bilateral WTO deal and said it could unlock investments worth billions of dollars, above all in the energy and aircraft sectors.

"We are very confident that the United States and Russia will sign a bilateral agreement at the G8 or the day before," Andrew Somers told a news briefing in Moscow. "It's a historic opportunity that should not be missed."

Somers said US Boeing Co could subsequently sign a deal to sell 22 B-787 'Dreamliner' jets to flag carrier Aeroflot. Boeing is competing with Europe's Airbus for the US$3 billion order.

And, Somers said, "one or two" US oil firms could win invitations to participate in a project by state-controlled gas monopoly Gazprom to develop the vast Shtokman gas field in the Barents Sea.

Chevron Corp and ConocoPhillips are on a five-firm shortlist to join the US$20 billion project to supply North America with liquefied natural gas delivered by tanker.

The Kommersant daily said the WTO talks had reached a compromise, with the Americans withdrawing demands that foreign banks should be able to open branches in Russia and that Russia should crack down immediately on intellectual property abuses.

For its part, Russia would agree to open up its insurance market over seven years and agree to cut agricultural subsidies, which the paper said amounted to US$9.2 billion annually.

A US deal is the last major hurdle to Russian entry into the WTO. Russia is the largest economy outside the 149-member free trade club.

The diplomatic sources said this might, if it came off, change the atmosphere and get Russia interested in putting world trade on the G8 summit agenda.

That could help save the flagging Doha round from collapse, although there was no sign that the so-called G6 trade forum - which comprises the United States, the European Union, Brazil, India, Japan and Australia - would hold a formal meeting.

Representatives from all of the G6 countries, bar Australia, have been invited to the G8 summit.

- REUTERS