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G8 Chair, WTO Deal Highlight Russia's New Push in Foreign Relations
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Russia's presidency of the Group of Eight (G8) this year will end with Moscow making a successful thrust of initiatives on the world stage, most notably the discussion of energy security.

Russia's economic growth has averaged at nearly 7 percent and foreign direct investment has soared over the last few years. When President Vladimir Putin hosted other G8 leaders in his hometown of St Petersburg, Russia had an unprecedented opportunity to showcase its economic rise and deflect criticism against it.

Energy security became the catchword when Russia, the world's second largest oil exporter and No.1 in natural gas reserves, chaired the G8, a group of the world's industrialized nations, at a time of sky-high oil and gas prices. Energy security was listed as a top priority, along with education and fighting infectious diseases, for discussion during Russia's first-ever presidency.

"We stressed that open, transparent, efficient and competitive energy markets are the cornerstone of our common energy security strategy," G8 leaders said in the chair's summary.

In an action plan to enhance global energy security, the leaders "undertook to reduce barriers to energy investment and trade, making it possible for companies from energy producing and energy consuming countries to invest in and acquire upstream and downstream assets internationally."

European countries jittered when, at the start of the year, Russia cut off gas to neighboring Ukraine amid a bitter pricing dispute, briefly disrupting supplies to Europe as most of the gas Russia sends to Europe is shipped through pipelines that cross Ukraine.

The European Union (EU), which depends on Russian supplies for one quarter of its oil and gas needs, has been keen to formulate new principles of energy cooperation with Russia. However, EU leaders have failed so far to persuade Russia to commit to the Energy Charter, a document that regulates transit and investment in the energy sector and allows for greater market competition from foreign companies.

Russia, while pledging reliable supplies, demanded reciprocal moves for opening up its energy assets to European investors.

"Russia's desire to take ownership stakes in Europe's gas distribution markets makes perfect sense and is fully legitimate given Russia's energy assets and pipeline capacity," Masha Lipman, an analyst at the Carnegie Moscow Center, said in an article.

WTO deal

When Putin met with US President George W. Bush in St Petersburg, hopes ran high that the two countries would seal a deal on Russia's longtime bid to join the World Trade Organization (WTO) at the G8 meeting.

That deal did not come, highlighting difficulties in the talks.

However, at their meeting later this year when Bush made a refueling stopover in Moscow en route to Asia in November, both leaders confirmed they were going to sign a deal on Russia's WTO membership.

The accord, signed in Vietnam on the sidelines of the 14th Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Informal Meeting where Putin and Bush met again, capped marathon talks that had hit snags on financial services and farm produce, and it removed the last major hurdle in Russia's accession to the organization.

US Ambassador to Russia William Burns, writing in The Moscow Times daily newspaper, hailed the bilateral WTO agreement as "the single biggest achievement in economic relations between our two countries in over a decade."

In two meetings in the past month, the two leaders "have demonstrated a clear appreciation of the fact that the United States and Russia matter to each other and that a healthy relationship between them matters to the rest of the world," Burns wrote.

With the US deal, Russia, the largest economy still outside the Geneva-based world trade body, moved closer to WTO membership, but it has yet to complete talks with the former Soviet republics of Georgia and Moldova.

Georgia, which signed a deal with Russia in May 2004, announced in July this year that it would renegotiate the terms with Moscow. The Caucasus nation insisted on legalizing customs checkpoints on a certain section of its border with Russia before Tbilisi backed Moscow's WTO bid.

Moldova and Russia are expected to sign the agreement by the year end after Russia agreed to lift its ban on Moldovan wine and meat imports.

Economic Development and Trade Minister German Gref said last month that Russia might complete all required procedures and join the WTO next year.

EU ties

If the US agreement on WTO accession can be reckoned as a major achievement for Moscow, then ties between the EU and Russia needed some extra work to move forward.

Russia and the EU signed an agreement that eased visa rules at the Sochi summit in May. The visa agreement would facilitate the issuing of short-stay visas for some Russian and EU citizens, including students, civil servants, culture workers and journalists.

But the 25-member alliance failed to start negotiations on a new, more ambitious cooperation agreement with Russia at the EU-Russia summit in October because of Poland's veto. The negotiation mandate requires the unanimous approval of all EU member countries.

Warsaw demanded that Moscow lift its year-long ban on Polish meat imports, saying the restriction was politically motivated. But Russia maintained that the embargo had been imposed over food safety worries.

The Polish stance has disappointed other EU members and drawn criticism from Kremlin officials, but Moscow said it was ready to launch the talks at any time.

Russia "will be patient to wait for" the EU to get a mandate, Putin said after the summit in Finland, which holds the current EU presidency.

The new pact will focus on wide-ranging areas such as energy, trade, investment and human rights, and aims to replace the current decade-old agreement on partnership and cooperation that expires next year. The existing deal would remain in force until anew deal is reached.

But there were things that did move forward.

At the Helsinki summit, the EU succeeded in persuading Russia to phase out charges on European airlines for flying over Siberia by the end of 2013, settling a two-decade-old dispute over the matter.

European carriers pay more than € 330 million (about US$440 million) annually in charges for flying over Siberia.

(Xinhua News Agency December 15, 2006)

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