- The Washington Times - Thursday, December 19, 2002

GENEVA Russia is floating new offers to open its markets in a bid to advance its nine-year quest to join the World Trade Organization, senior Western and Russian officials said.
In a sign that he is trying to push ahead with reforms and integrate the former communist superpower into the global trading system, Russian President Vladimir Putin dispatched his first deputy prime minister and finance minister, Alexei Kudrin, to Geneva this week.
Mr. Kudrin held talks here with WTO chief Supachai Panitchpakdi and addressed a WTO session in which he said Russia is stepping up its political commitment and taking steps to accelerate its entry, trade diplomats said.
The Norwegian chairman of the Russia-WTO entry talks, Ambassador Kare Bryn, told reporters yesterday that the visit of Mr. Kudrin "helped to insert the sense of urgency in the negotiations."
He said the new rounds of talks will be held at the end of January and in March and April.
In confidential talks in recent weeks with the United States, the 15-nation European Union and Japan, Russia has proposed to reduce its average applied tariffs from 16 percent to 10.4 percent and could reduce them further to 8.5 percent, senior Russian and Western diplomats said.
"We are making good progress [on tariffs]," said senior trade officials on both sides of the Atlantic Ocean, who spoke on the condition of anonymity.
But the Russian proposals on trade in services such as banking, insurance and telecommunications are lagging the steady progress notched in the talks, particularly for industrial products, top Western WTO diplomats said.
Moscow has suggested allowing foreigners to own up to 100 percent equity of individual banks, but hold a maximum stake of 25 percent of the whole Russian banking sector, up from a previous offer of 12 percent of the sector.
Senior Western officials say domestic political constraints are the major reason for the slow pace in the services segment.
Maxim Medvedkov, Russia's deputy trade minister and chief WTO negotiator, conceded that progress in services has been "a bit less," and that agriculture and services issues and differences over Russia's pricing system for natural gas are major stumbling blocks.
Meanwhile, Russian negotiators said average industrial tariffs now in the range of 8 percent to 9 percent could be lowered to 5 percent or 6 percent. The Kremlin is ready to lower agricultural tariffs from the current average of 17 percent to 12 percent.
High agricultural tariffs, which reach at least 25 percent, and high auto and aircraft tariffs are sensitive both domestically and with major trading partners.
On the auto sector, senior Russian officials told The Washington Times "we are ready to come down to 15 percent" but were quick to add the European Union and Japan are asking for about 10 percent.
In the area of civil aircraft and parts, a major export sector for the United States and Europe, Russian negotiators said they are ready to reduce tariffs from the current levels of 20 percent down to 15 percent for long-range aircraft, and down to 10 percent for smaller planes.
Mr. Medvedkov told reporters: "We need protection here to modernize industry."
Senior European and U.S. trade officials say they would like Russia to scrap all aircraft tariffs and to remove all duties for pharmaceuticals, furniture, farm equipment, and information technology agreement products such as computers, semiconductors and telecom equipment.
But Russian officials say that is out of the question.
The country has finalized tariff negotiations for goods with nine of the 144 WTO member countries, and hopes to finalize with another 16 by early spring, Mr. Medvedkov said.


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