Trading with Russia (The EU, USA and WTO)

Russia has been in the news lately – but for the wrong reasons (alleged poisoning of an ex-spy defected to the UK), other than that they have been busy negotiating with other superpowers regarding trade.

Firstly, with the European Union with regards to energy contracts -the European Union urged Russia and other neighbors Monday to commit to long-term energy contracts that will guarantee them customers and investments while securing affordable oil and natural gas supplies for the EU in the decades ahead.

The appeal, on the first day of a two-day conference of officials from the 25 EU nations and oil and gas exporting countries, underscored Western Europe's desire to make energy a top priority at a time when its demand is growing, its own supplies are dwindling and world prices are high.

Europe was ready to make "multibillion investments" in energy production and transport but wanted partner nations to commit to transparency and "stable, predictable and nondiscriminatory frameworks," said EU Energy Commissioner Andris Piebalgs.

"The scramble for energy risks being pretty unprincipled," said EU foreign policy chief Javier Solana. "However we choose to deal with such regimes, others will put their energy needs above everything else."

Russia currently supplies a quarter of Europe's oil and over two-fifths of its gas.

And secondly signing a key trade deal with U.S. - Russia and the United States signed a key trade agreement on Sunday, removing the last major obstacle in Moscow's 13-year journey to join the World Trade Organization.

The deal, inked on the sidelines of a gathering of Pacific Rim economies, is a powerful vote of confidence in Russia — the largest economy still outside the 149-member WTO — and signals its integration into the global trading system.

"I am very pleased to be here today to have the opportunity to celebrate this very important milestone as Russia moves one important step closer to becoming a member of the WTO," said U.S. Trade Representative Susan Schwab.

"Russia belongs as a full-fledged member of the WTO," she said. "We look forward to continuing these efforts to improve the economic and commercial ties between our two nations."

Russia's Trade and Economic Development Minister German Gref called the deal a "historic step — the last step — that signifies the return of Russia to the market principles of the world economy."

As part of the deal, Gref said that Russia had pledged to cut import tariffs on a range of goods — including aircraft, computer technology, agriculture and machinery.

Speaking after the signing ceremony Gref defended those concessions. "I think we found the necessary balance. On all positions that were sensitive for us we found a compromise."

The two countries also managed to overcome the high-profile question of Russia's shaky record on protecting intellectual property rights. Pirated films, music and software in Russia cost U.S. companies nearly $1.8 billion in 2005.

Schwab said that while talks with Russia on the piracy question would continue at the stage of multilateral negotiations, she expressed satisfaction with Russia's progress: "We believe that the bilateral agreement is very good."

Before it can join the WTO, Russia must consolidate the bilateral agreements it has forged with 57 countries. Gref said he expected that process to be completed by the middle of next year.

After that, the WTO needs to vote to approve its membership. But some questions remain.

Georgia and Moldova have threatened to block Russia's bid because Moscow has blocked key exports from those nations.

"Without Georgia's consent, Russia will not join this organization. And Georgia has not given its consent so far," Deputy Economic Development Minister Vakhtang Lezhava said on Georgian television.