Russian President Vladimir Putin hopes the signing of the protocol on the WTO will create a positive atmosphere for settling complicated international issues.
Photo: Dmitry Azarov
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Russia and U.S. Sign WTO Agreement with White Knuckles
Russian President Vladimir Putin met with U.S. President George W. Bush in Hanoi yesterday and reached an agreement with him about removing the restrictions from the Sukhoi company. Russian Minister of Economic Development and Trade German Gref met with U.S. Trade Representative Susan Schwab and signed the Russian-American protocol that ends negotiations over Russia's accession to the WTO. That document was many pages long. Kommersant special correspondent Andrey Kolesnikov reports from Vietnam that the success of both those agreements was in doubt to the very last minute.
Everyone was waiting for the meeting for the presidents yesterday. Frantic negotiators Gref and Schwab were to have the Russian-American protocol that would allow Russia into the WTO finished by that time. The evening before that, there was no assurance of their success. Gref was looking unhappy, and he wouldn't have if the negotiations were really completed.
Gref had just come from Sri Lanka. That country's leaders had unexpected declared their dissatisfaction with Russia over duties on imports of Ceylonese tea to Russia. It was masterful timing. Gref was not to have any unsettled issues by the time the Russian and U.S. presidents met.
I asked Gref when he showed up at the international press center whether the signing of the protocol the next day was a sure thing.
“Yes, of course,” he said firmly and confidently. But there was neither firmness nor confidence in his eyes. As a matter of fact, there only thing in his eyes was exhaustion.
“Did you really reach an agreement on indulgences for Russia's agricultural trade with the U.S.?” I asked.
“When a country enters the WTO, it is usually a matter of canceling all quotas in trade,” he replied. “This time, we reached an agreement with the U.S. to extend our quotas on American agricultural imports until the beginning of 2009 and then longer.”
“That's the agreement?”
“Well, yes. The quotas can be extended beyond 2009. But in 2008, we have to warn our American partners about it. That is what we discussed almost longest of all. The negotiators from both said are, put directly, not simple people,” Gref said with satisfaction. “Other issues were supposedly agreed on earlier, but it has to be understood what kind of work those negotiations are. We agreed on the financial services market even before the Big Eight summit in St. Petersburg and created a bundle of methods for estimating the quotas on banking services. But all the negotiations with Americans after the G8 began with conversations about the most sensitive problems, including this one. A few hours go by and bother sides understood that nothing had changed and nothing would change.”
“Is there any chance that you won't sign the protocol tomorrow? Maybe negotiations will start again on sensitive topics?”
“No chance,” Gref said. “Only a virtual chance.”
So there was a chance.
“You understand,” the minister continued, firmness and confidence receding, “it was necessary to agree on six protocols that we signed based on resolutions of the Russian and U.S. governments. But when we sat down to sign them, there were changes in them, additions… And they had to be conciliated again… But we were able to reach the binding of the tariff levels that we had set as a goal. So we maintained the target parameters for agriculture that our leading agencies were asking for.”
“You're talking mostly about meat.”
“Plant crops played little role in the negotiations,” he agreed. “We concluded negotiations with 57 WTO member states in six years. That's practically an unknown precedent in WTO practice.”
“They usually do it faster?”
“We spent, I think, a whole year,” he continued with hearing my question, “with the Americans just determining whether deep freezing kills trichinosis in meat.”
He paused a moment and then continued with a grimace. “One thing for chicken, another for pork, something else for mad cow disease. And different ages for all of them… It's easier just to die…” his expression was that of someone ready for the deep freeze himself.
“Did you reach an agreement with Sri Lanka?” I asked.
“We went to the president of Sri Lanka and they accepted our conditions – a 12.5 percent duty on imports of their tea. We, of course, aren't a tea-producing country.”
“And what about Krasnodar Territory?!?!”
“Krasnodar Territory,” he elaborated with a heavy voice, “produces 1 percent of the tea supplied to the Russian market. If they fully utilized their capacity, it might come to 2 percent. And 12.5 percent is the duty on tea in bags. Loose tea will probably have a zero duty.”
“But the duty had been 20 percent. How is 12.5 percent a victory?” someone asked him.
“Because they were demanding 5 percent,” Gref admitted. “The problem there is that one small country that has not been in the WTO for long gave Sri Lanka a duty of about 5 percent and they also wanted to get it from us. Everything had been agreed on until yesterday, you understand, but tea bags! We went to the president. I told him, You are our last country! Come on and agree! You win $140 million.' And so they agreed, although only for one year so far.”
Just then they asked Gref to stop talking because one of the APEC leaders would be passing by. Gref, like an experienced negotiator, nodded but did not move. The Vietnamese organizers, having no experienced negotiators among them, ushered him toward the door.
“A policy of ultimatums doesn't work in trade,” Gref continued as he passed through the door. “Ultimatums usually backfire on those who make the.”
“So the fact that there is no Georgian wine in Russia will backfire on it?” I asked.
“You have to understand that that is a political issues,” the minister admitted riskily.
“What if Georgia doesn't give its agreement on Russia's accession to the WTO?” I asked.
“Doesn't give it?” the minister echoed.
“They've already taken their signatures off the agreed-upon protocols.”
“Nothing like that has ever happened in WTO practice. If they continue to be so stubborn, procedures may be taken within the WTO.”
“Or try to settle it in an international court?” I asked.
“No, not in an international court.” Gref replied. “There is, I repeat, an internal procedure in the WTO. But I don't want to talk about it now.”
Looking at him, it was clear that he did want to but couldn't.
“So there is a way for Russia to accede to the WTO without Georgia's approval?” I pressed on.
“Well, I don't want to talk about that topic,” Gref repeated.
From time to time, people approached Gref. First Russian Foreign Minister Sergey Lavrov, whose briefing in the corridor had ended long ago, tapped him on the arm. When they tried to interrupt him and drag him aside, as they did with Gref, Lavrov turned around and said to the Vietnamese, “You have come up to the Foreign Minister of Russia and touched him. Do you think that is proper?” No one else bothered him that day.
Then Maritime Territory Governor Sergey Darkin come up to Gref and whispered in his ear.
“No need to distract him he's already distracted enough,” I told the governor.
“We wanted to look at this building together. They built it specially for APEC.” Darkin said.
“And you want to hold the Russian APEC summit in 2012 in Vladivostok!” I recalled. “But you can't be sure. No decision has been made.”
“We are hoping,” the governor said.
“You have to talk about it more often as though it were decided, and maybe then it will be decided,” I advised.
“Yeah,” he said brightly. “That's what we'll do!”
And then he took Gref away.
The next morning, the first person I saw was Darkin. He was standing near the entrance to the international press center getting ready for his press conference on the possibility of Vladivostok hosting a future APEC summit. He followed our plan to the letter.
“How was the building?” I asked.
“We saw it. It's kind of simplistic,” he said dismissively. “I think things should be done differently. Hold an international; tender… What are those things in the grass, for instance? Why are they there?”
“Those are solar batteries, Sergey Mikhailovich,” someone nearby offered.
“I don't know,” the governor said. “And what are those hills?”
“Those are bomb shelters, Sergey Mikhailovich.”
“Yes?” Darkin looked dubious. “I don't think they held a tender here.”
The signing of the WTO protocol was rescheduled from 11:00 to an undetermined time, but Darkin began his press conference in a few minutes. He said that the living conditions in the Russian Far East “are not the most comfortable in the world and are the worst in our country on the whole.”
“We are counting on founding large megapolises in the south of Maritime Territory,” Darkin said, “where we will need 5-7 million people living. That is a very ambitious task since the population of the Far East is only 7 million people now.”
I would have been pleased to stay at the press conference, for Darkin is pure listening pleasure, but the signing of the Russian-American protocol was finally going on in Room 307of the international press center.
There Russian and American flags had been set up as had two enormous cardboard boxes, one red and one black. Two copies of the “Supplements on Trade and Services,” 850 pages long each, lay in the boxes. The protocol itself was a single page.
The Russian negotiators came to the signing as if they were coming to a celebration. If you only had Christmas once a year, you would understand how they felt. Negotiators Medvedkov and Kushnirenko, who was wearing a black bowtie with a gray suit, took pictures of each other in front of the cardboard boxes.
Gref and Schwab finally arrived, sat down at their places, took pen and paper and froze. They were waiting to see who would sign first, haggling to the very last moment.
“This is our last bilateral protocol,” Gref announced afterward. “And I want to thank Susan Schwab and all of her office for their hard work and daily labor.”
Maxim Medvedkov had an inhuman smile that hinted at the negotiators' really feelings for each other.
Schwab explained the two-hour delay in the signing. “There is so much going on in Hanoi right now,” she said. “It was a logistics question. Nothing substantive.”
Later I learned that the documents weren't delivered on time.
Gref conscientiously announced that “the U.S. government has taken it on itself to guarantee the quality of meat in correspondence with international supplies, and Russia has received the right to inspect American meat plants,” but only with the preliminary agreement of the Americans. That is to say that the American attained almost everything they wanted in that issue, which Putin insisted was a principle one. Russia did not receive the right to inspect the meat on its own territory.
“I am very glad today,” Bush said a few hours later at the Sheraton Hotel, “that Mr. Gref and Ambassador Schwab signed the documents. I want to congratulate you too, Vladimir. Thank you very much for all of your efforts, because our dialog today was also very important.”
That dialog had begun an hour earlier. Putin came to the Sheraton with a bouquet of white flowers, which he presented to Condoleezza Rice for her birthday. It had to be admitted that it was a lovely scene.
The statement to the press was very brief. It wouldn't have happened at all, because the Americans suddenly didn't want any journalists around. But Lavrov convinced Bush that it was important for him to be seen at this important moment.
“I agree,” Putin put in, “that the signing of the protocol creates a positive background for all of our activities, including in very complicated problems of international relations.”
I thought when I heard him that they had traded the protocol for compromises on Iran and North Korea, as many analysts expected. But when I read the APEC resolution, I did not see anything more pointed about North Korea than had been in the UN Security Council resolution quite a while ago. Later, when Lavrov was commenting on the situation in Iran, it seemed to me that the Russians had moved even farther away from the American position.
“And the sanctions against Sukhoi have been removed,” a high-placed member of the Russian delegation was saying as I left the room were Bush and Putin were still smiling and shaking hands, as if for non-existent cameras.
“And what about Rosoboroneksport? They didn't remove the sanctions? Doesn't that matter?”
“Rosoboroneksport? I'll go ask.” He went back into the room. In the meantime, the presidents left.
And Rosoboroneksport will have to wait until the next meeting.
Andrey Kolesnikov
All the Article in Russian as of Nov. 20, 2006
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