Associated Press - 05.21.2004

New York Times

EU Supports WTO Membership for Russia


By THE ASSOCIATED PRESS

MOSCOW (AP) -- Ending months of uncertainty, Russia agreed Friday to speed up its ratification of the Kyoto Protocol on combating global warming after the European Union offered to support its longtime bid to join the World Trade Organization.

Russian President Vladimir Putin said the two issues were not linked, but he added that a compromise after years of tense talks helped assuage some of Russia's economic concerns, clearing the path for faster movement on Kyoto.

"The EU has met us halfway in talks over the WTO and that cannot but affect positively our position on the Kyoto Protocol," Putin said after the one-day Russia-EU summit. "We will speed up Russia's movement toward the Kyoto Protocol's ratification."

No timetable was given.

The EU has long urged Russia to ratify the 1997 protocol aimed at reducing emissions of carbon dioxide and other greenhouse gases, which are widely seen as a key contributor to global warming.

But Kyoto foes in Russia argue that the pact will stifle the nation's economic growth, derailing Putin's plan of doubling Russia's gross domestic product in 10 years.

In order to take effect, the Kyoto Protocol must be ratified by at least 55 countries accounting for at least 55 percent of global emissions in 1990. That minimum can only be reached with Russia's ratification because the United States and several other key countries have rejected the treaty.

Russia's emissions already are below the protocol's limits.

"We support the Kyoto process," Putin said. "We have some concerns connected to the obligations we have to take."

He did not elaborate.

Moscow has been trying for years to join the WTO, the 147-nation body that sets international trade rules. Russia, the biggest economy outside the organization, must conclude agreements with any WTO members that demand it as a condition for joining.

Putin said Friday's compromise concerning the WTO "reduces midterm risks for our economy and, to some extent, unties our hands for moving faster on joining the Kyoto process."

Putin said that the agreement with the EU, which accounts for more than half of Russia's trade, "would have a positive impact on our negotiations with the United States, China and other leading trade powers."

The agreement on Russia's accession to the WTO settles numerous trade disputes that have marred EU-Russian relations for years.

The EU had pushed for Russia to raise its domestic energy prices to world levels but Russia rejected that, saying cheaper energy was its natural advantage.

The EU also pushed for Russia to reduce import tariffs and liberalize some of its key Russian markets.

As part of Friday's deal, Russia agreed to gradually increase domestic gas prices in line with its own energy strategy and promised to give private companies access to state-run gas pipelines.

At the same time, the state-run Gazprom gas giant will keep its export monopoly.

Russia also pledged to reduce its average import tariff from 18 percent to 8 percent, liberalize its banking and communications industries and streamline overflight charges for European carriers flying over Siberia by 2013.

"The EU-Russian WTO agreement is a joint step forward for open markets and trade liberalization in Europe," said Irish Prime Minister Bertie Ahern, the European Council's current president.

Friday's summit was the first after the EU added 10 members, most of them former Soviet satellites, on May 1. Moscow was concerned that the expansion would hurt its trade interests.

But just days before that expansion, the EU and Russia signed a deal easing Moscow's economic concerns and guaranteeing language rights for Russian speakers in the Baltics.

Putin and EU officials said they again discussed human rights in the Baltics and the war in Chechnya, but they sought to play down differences.

"We have achieved tremendous improvement in deepening our relations," European Commission President Romano Prodi said.