Russia and the US signed a key trade agreement on the sidelines of a meeting of Pacific Rim leaders yesterday -- a major economic milestone that paves the way for Russia's entry into the WTO.
As the largest economy still outside the 149-member WTO, which sets the rules for global trade, the deal with the US is a powerful vote of confidence in Russia's investment climate.
It also marks a bright spot in the two countries' relations that have been marred by disagreements over Iran's controversial nuclear program and Washington's fears of a roll back of democratic freedoms under Russian President Vladimir Putin.
"I am very pleased to be here to celebrate this very important milestone as Russia moves one important step closer to becoming a member of the WTO," said Susan Schwab, the US trade representative. "Russia belongs as a full-fledged member of the WTO."
Membership in the WTO would mean Russia, a big oil and gas exporter, would receive the same favorable tariff rates for its products as other members. Also, Russia and other member countries would have to follow WTO rules in trade disputes.
Freer trade would give Russian companies more opportunities to sell their goods on world markets. Joining the WTO also might make its sizable market of potential customers even more attractive to companies in the US and elsewhere.
Russian Trade Secretary German Gref and Schwab inked the deal in Hanoi on the sidelines of the APEC summit, just hours before Putin and US President George W. Bush were due to hold talks.
The deal had been widely anticipated. On Nov. 10, both sides announced that all the main questions had been settled and all that remained was for a few technical questions to be nailed down.
On Saturday Gref said that the signing would mark the end of a "marathon" six-year process of signing bilateral agreements with 57 countries. Next, he said the two-way deals must be consolidated so that all members trade with the candidate country under the same rules. Gref said he expected that process to be completed by the middle of next year.
Moscow also faces political challenges from Georgia and Moldova, which it has angered by limiting their exports to Russia in moves their leaders say are punishment for their pro-Western politics. Gref said on Saturday that he hopes that those problems would also be resolved by the middle of next year.
About four months ago, US and Russia had appeared on the verge of an agreement. But in a major embarrassment for Moscow, it failed to materialize -- right before the summit of leaders of the world's wealthiest countries that Putin was hosting in St Petersburg.
Vietnam, hosting the APEC summit, was approved to become the WTO's 150th member earlier this month. It is expected to officially join the world body next month.