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Daily Telegraph: Russia to join WTO as Bush backs down

President George W Bush

EXTRACT: The break-through comes at a time when the Kremlin appears to be tightening its grip on the economy, waging a barely-disguised campaign of harassment against Shell, Exxon, and other foreign companies.

By Ambrose Evans-Pritchard Last Updated: 12:44am GMT 11/11/2006

Washington has cleared the way for Russia to join the World Trade Organisation, ending years of bitter wrangling between the two ex-rivals. Presidents George W Bush and Vladimir Putin are to toast the accord in Moscow next week, marking Russia’s arrival as a full member of the global system nearly two decades after the fall of Communism.  

“We have an agreement in principle and are finalising the details,” said US trade representative Susan Schwab.

Russian negotiator Arkady Dvorkovich said talks had been going “round the clock” in a frantic effort to nail down the details. The deal lifts the last big obstacle to Russia’s 13-year bid for membership, although two of Moscow’s sworn enemies could still cause grief.

A large chunk of Moldova is still occupied by Russian troops and Georgia faces a Kremlin transport blockade. Both have so far refused to sign the accession protocol, which must have the unanimous backing of all 149 members of the WTO.

Russia’s entry is more symbolic than real since the vast majority of exports in oil, gas, and commodities are barely affected by WTO rules. Flush with petro-billions and the world’s third largest exchange reserves, the country already has seat at the top table of global business.

Even state-companies such as the oil group Rosneft have been able to tap into the London capital markets without difficulty. The break-through comes at a time when the Kremlin appears to be tightening its grip on the economy, waging a barely-disguised campaign of harassment against Shell, Exxon, and other foreign companies.

However, diplomats said the deal has more to do with Iran’s nuclear weapons programme than world trade. It is understood that the Kremlin has tacitly agreed to soften its opposition to United Nations sanctions against Iran. Mr Putin has been exploiting the Iran impasse to force concessions on the WTO, a strategy that appears to have paid off.

The Russians have their own motives for locking in a deal fast after the political earthquake this week in Washington. The Kremlin fears that the Democrats may use their muscle on Capitol Hill to push a more protectionist agenda, slamming the down the window on future trade pacts.

Mr Putin had hoped to announce Russia’s accession at the St Petersburg summit last July but the deal foundered over US demands for greater beef and pork access to the Russian market. The Kremlin said it was not willing to risk Russian consumer health until it had carried out a full inspection of US slaughter-houses, a retort that infuriated Washington.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/11/cnwto11.xml

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