Russia threatens U.S. with trade war

Vladimir Radyuhin

Alleges footdragging on WTO accession

Russia may stop concessions for U.S. poultry, red meatU.S. warns Moscow against complicating negotiations

MOSCOW: Angered by what it sees is deliberate stalling by the United States on its WTO accession talks, Russia has warned Washington of economic sanctions unless agreement is reached by October.

Moscow threatened to scrap preferences for U.S. poulty and red meat exports to Russia if Washington failed to support the Russian bid to join the world trade body at the next round of Geneva talks scheduled for October.

"Russia is resolved to firmly defend its interests, and if the October talks fail, it will have to return to the original positions that it held before agreements were reached on the trade of meat until Russia joins the WTO," Russia's Economy Ministry said in its press release quoting from a letter Economy Minister German Gref sent to U.S. Trade Representative Susan Schwab earlier this month.

This is the first time resurgent Russia threatened to crack the whip of sanctions against the U.S. Until now it was Washington which repeatedly imposed sanctions on Moscow for its cooperation with Iran.

The agreement Russia threatens to revoke is a four-year accord signed in June 2005, allowing the U.S. to fill three-fourth of Russian poultry import quotas at concessional tariff. The agreement made Russia the biggest buyer of U.S. poultry. This year the U.S. is expected to ship to Russia $600 million worth of poultry, a third of its total poultry exports. Russia hoped the deal would help it secure U.S. support for its WTO bid, but its hopes have been dashed as the U.S. today remains the only country out of the 58-member Working Party on Russia's accession which is yet to sign a bilateral protocol.

Washington angrily reacted to Russian threats, with Assistant U.S. Trade Representative Sean Spicer saying that any decision by Russia to scrap preferences for U.S. poultry and red meat may complicate negotiations on Russia's accession to the WTO.

The Russian Economy Ministry suggested that the U.S. stand on Russia's WTO bid reflected a broader American agenda to seek unilateral gains at the expense of other countries. "The WTO is in a deep systemic crisis resulting from the disruption of multilateral talks on agriculture," the Ministry said in its release. "Most WTO members link this to the rigid position of the United States, and in particular with that of Susan Schwab, who so `successfully' held talks with Gref in St. Petersburg," the Economy Ministry said.

Despite high expectations, Russia and the U.S. failed to reach the WTO deal in time for the Group of Eight summit in St. Petersburg last month. Moscow has accused Washington of making demands well over and above standard requirements for WTO candidates.

`Frustration on both sides'

AFP reports:

US President George W. Bush and Russian President Vladimir Putin agreed at last month's G8 summit on a target date of October for a final agreement.

Russian officials are set to inspect U.S. meat processing plants in the intervening months.

Asked about Gref's implicit ultimatum, Andrew Somers, President of the American Chamber of Commerce in Russia, said: ``The statement probably reflects frustration on both sides.''

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