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WTO negotiations will continue ''in a calmer atmosphere'' after the G8 summit

ST. PETERSBURG, Russia - 07/15/06 - Russia's dreams of a World Trade Organization accord with the US have been dashed despite attempts to find solutions to a thorny package of issues including US access to Russia's agriculture and financial services markets, phyto-sanitary and veterinary control, and import duties on aircraft. 

"We were unable to reach an agreement and a decision was made last night to suspend the negotiations," said Maxim Medvedkov, Russia's senior WTO negotiator.

The protocol, he said, "will not be signed either today, or in the coming weeks."

The two countries will continue the talks "in a calmer atmosphere" after the G8 summit, Medvedkov said, declining to anticipate when the talks might be finished.

Despite the collapse of the accession talks, President George Bush said agreement was nonetheless near.

"We want Russian accession to the WTO and will continue negotiating," Bush said after bilateral talks with Russian President Vladimir Putin, ahead of a full Group of Eight summit yesterday.

He said a deal, which would end Russia's 13-year campaign to join the World Trade Organization, was "almost reached" but added "there's more work to be done."

Appearing with Bush at a press conference after their meeting, Putin said that although "our personal relations help us work together ... they also don't stop us from defending our national interests in any sphere."

"It's a complex process that lasts years," he said. "I can't say that we were not expecting such a complication. We will continue to work, defending our interests and the interests of our growing economy."
 

US Trade Representative Susan Schwab, echoed President Bush's optimism, telling then press that reaching consensus was "a question of weeks."

According to Schwab, "significant progress" had been made in narrowing differences over the protection of US copyrights and patents and boosting the sale of American manufactured goods, adding that negotiators were unable to resolve a dispute over Russian barriers to the sale of US-produced beef and pork.
 
As part of its accession bid, Russia has already signed bilateral agreements with its other key trading partners and now needs a green light from the US to join the 149-member Geneva-based WTO, which sets global trade rules.

Russia is today the only major global power operating outside WTO trade regulations, and US officials have said repeatedly they would prefer to have Moscow formally bound by the organization's rules.

An agreement on WTO membership here would have constituted a major summit success for Russia, while confirming the country's efforts to become a global commercial and economic powerhouse.

Earlier this month, Putin warned that Russia would no longer feel obliged to respect WTO regulations "in principle" if it were denied official membership.

Russian press reports yesterday said the main stumbling block was Washington's insistence on an easing in Russian health regulations, which some of Russia's trading partners have charged are applied to justify politically-motivated non-tariff trade barriers.
 

Washington has also been pressing for Russian guarantees on the opening of the country's financial sector to foreign participants and for a reduction in agricultural subsidies.

Prospects for a deal appeared to brighten earlier last week week when Russian Finance Minister Alexei Kudrin said negotiators had cleared a key obstacle, with Washington dropping a demand that Moscow allow foreign banks to open their own branches - rather than legally-registered Russian subsidiaries - on its territory.
 

In exchange Russia would lower barriers to foreign participation in the insurance sector.

President Bush also hinted at domestic and political hurdles that need to be overcome in the US before an agreement can be signed with Moscow.

"We're tough negotiators," Bush said, adding that any agreement would have to be acceptable to Congress. 

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