U.S. pact paves way for Russia in WTO

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The United States and Russia have reached a deal that would pave the way for Russia to join the World Trade Organization, the two countries announced yesterday.

"We have an agreement in principle and are finalizing the details," U.S. Trade Representative Susan C. Schwab said.

She and Russian Economic Development and Trade Minister German Gref hope to sign the agreement during the Asia-Pacific Economic Cooperation (APEC) summit next week in Vietnam.

Russia, the last major economy not a member of the 149-member WTO, has tried for 10 years to join the Geneva trade organization, which sets international trade and investment rules. As a member, the Russian economy stands to grow by $10 billion annually through increased trade and foreign investment.

U.S. and Russian officials resolved issues over U.S. meat and poultry exports, and Russia agreed to cut tariffs on manufactured goods, the trade representative's office said. The cuts are expected to help U.S. sales of civil aircraft and parts, medical and scientific equipment, agriculture, power generation, construction equipment, information technology, and chemicals.

National Association of Manufacturers Vice President Frank Vargo called the announcement a "historic step."

"Russia is the only large economy not yet in the WTO, and it is simply too big to leave it outside," he said.

Russia agreed to help exports in the service industries, including companies in construction, finance and telecommunications services. Settling a long dispute, Russia said it would allow full foreign ownership of banks once Russia has joined the WTO, and will allow foreign insurance companies to operate through subsidiaries, although it may impose limits if foreign investment becomes too high.

The Securities Industry and Financial Markets Association praised the agreement, saying it would "further integrate Russia into the global economy."

"It will create new opportunities for securities firms and their customers, opening Russian markets to American firms and providing American expertise and capital to Russia's economy," association Co-Chief Executive Marc Lackritz said.