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Financial markets key problem in WTO talks with U.S. - Gref

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MOSCOW, February 17 (RIA Novosti) -The issue of access to Russia's financial markets remains the key obstacle to concluding bilateral negotiations with the United States on accession to the World Trade Organization, the minister of economic development and trade said Friday.

"The package of financial markets is the stumbling block," German Gref told an international congress, Russia in the WTO: Hopes and Strategic Opportunities.

Gref said the Russian side found it difficult to understand the position of U.S. negotiators on gaining access to Russian financial markets. Russian legislation currently prohibits the opening of wholly owned foreign bank branches in the country in a bid to protect the weak banking sector, but affiliates with Russian capital are allowed.

"We have held meetings with representatives of the Russian banking sector working on the Russian market. They say they do not need bank branches in Russia because they are already represented by affiliates and that is enough. They are not interested in cross-border services and, moreover, they want their rivals to enter the Russian market on the same terms," Gref said.

Gref said Russia's position remained unchanged and he was against the ban being lifted, but he added he hoped a solution to this "most delicate issue" would be found during negotiations. He said experts from the two countries would discuss the remaining issues in early March, and then he and U.S. Trade Representative Rob Portman would have a final discussion in late March or April.

The minister said although formulas had been found to solve other controversial issues, particularly agriculture and the access of foreign aircraft and components to the Russian market, final confirmation had yet to be received from the U.S.

The minister said he also found it hard to understand Washington's insistence on lowering import duties on fermented milk products, and yogurt.

"We have never received such products from the U.S. and do not intend to," Gref said, adding that Europe, which provides these products, had agreed to maintain the import duties.

Gref said Russia would not compromise on the issues.

The minister reminded those present that Russia had held talks on its accession to the WTO with 58 countries, a record in the history of the organization. The talks remain unconcluded with the U.S. Technical details are being completed with two other partners, Australia and Colombia, and documents on the completion of talks will be signed in the near future.

Gref said he expected the country to join the WTO in late 2006.

"We could conclude multilateral negotiations in the first half of 2006 and then complete all the formalities in the second half to join the WTO at the organization's next ministerial conference at the end of 2006," the minister said.

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