Medvedev Signs Tariff Pledge in U.S.

APGeorge W. Bush welcoming Dmitry Medvedev to the White House in Washington late Friday for a weekend G20 summit to discuss the global economic crisis.
President Dmitry Medvedev joined the other leaders of G20 nations Saturday in pledging not to introduce new trade barriers over the next 12 months, a commitment that might complicate the government plans to insulate the national economy from the global crisis.

Medvedev, in Washington for a G20 summit where he signed a final declaration listing measures to deal with the crisis, also used his first trip to the United States to call for talks with President-elect Barack Obama to take place "without delays" to overcome a "crisis of trust."

The leaders of countries accounting for 90 percent of the world's economic output said at the summit that a commitment to an open global economy was vital to countering the financial crisis.

"We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty," their declaration said. "In this regard, within the next 12 months we will refrain from raising new barriers to investment or to trade in goods and services."

Prime Minister Vladimir Putin signed a plan earlier this month calling for a rise in import duties "on a wide range of goods." Since then, import duties were raised on used cars, and measures to cut import quotas for U.S. poultry and all pork are still in the works.

The crisis plan developed by Putin at Medvedev's behest also calls for a law giving preference in purchasing by state-funded programs to domestically produced goods. The government has until the end of next month to draft the bill.

Medvedev spoke briefly at the summit and commented only broadly after its conclusion.

"I believe that its results are quite positive," he said at a meeting with British Prime Minister Gordon Brown, Interfax reported.

Dmitry Peskov, Putin's spokesman, said Sunday that he could not comment on the possible conflict because he had not yet seen the declaration.

The declaration might force the government to amend some of its plans, said Maxim Tishin, a portfolio manager for UFG Asset Management.

"I agree that these things run somewhat counter to each other, perhaps not from a legal prospective but at least ideologically," Tishin said. "The more I think about it, the more curious I get about how they will find a way out."

Yuri Gripas / Reuters
Albright introducing Medvedev before a speech in Washington on Saturday.
The action plan coined in Washington is not legally binding, he noted.

The government will go ahead with raising import duties regardless of whether it considers it the right way to protect certain industries, said Ronald Smith, chief strategist at Alfa Bank. The fact that the country's main exports are oil, gas and weapons makes retaliation difficult, he said.

"You'll still need energy," he said. "So yes, there is a conflict there, but I think you'll see that what Russia is doing it sees to be in its own interests."

In a positive development for Russia, the G20 leaders agreed that emerging and developing economies should have a greater voice and representation in international financial institutions like the International Monetary Fund and the World Bank. It was unclear Sunday if the agreement meant changes to a current IMF plan approved in March, which increases the voting weight of these economies.

Tishin said Russia's role was unlikely to increase significantly, as the economies of the developed countries remained strong despite the crisis and would maintain their weight in international financial institutions.

Blaming the worst financial crisis to strike since the 1930s on a failure of investors to understand the risks they were taking, the G20 leaders did not refer to the U.S. subprime mortgage bubble that many blame for triggering the global debacle.

They pledged to "take whatever further actions are necessary" on top of the substantial liquidity injections in recent months and also vowed to stimulate consumer demand, although they didn't provide any specifics.

The declaration called for better regulation of international banks and complex financial instruments, which are believed to have contributed to the financial meltdown.

The leaders said they would meet again by April 30 and instructed their finance ministers to address a long list of measures to be worked out before those discussions.

Medvedev called for the creation of international arbitration courts and a commission of "financial gurus" to hammer out proposals to counter the crisis.

Later Saturday, Medvedev addressed the Council on Foreign Relations and fielded questions in a session moderated by former U.S. Secretary of State Madeleine Albright, who sat beside Medvedev at the summit.

Medvedev said Russia and the United States lacked "trust" in each other and expressed hope that the Obama administration — and a one-on-one meeting with the president-elect — would help build better ties.

"I think we have good chances to restore relations to their full extent. We can start with anything you like; anti-missile defense in Europe is a good topic," he said, Interfax reported. "It seems to me that the main thing is for this meeting to take place soon, without delays or preliminary conditions."

Relations between the countries have been soured lately by Russia's war with Georgia, a U.S. ally, and by Washington's plans to deploy elements of an anti-missile shield in Poland and the Czech Republic. Medvedev said Saturday that Russia would locate short-range Iskander missiles in its western exclave of Kaliningrad to target the shield installations only if the United States moved ahead with its plans.

Medvedev announced the installation of the missiles in his first state-of-the-nation address on Nov. 5, when Obama's win the day before monopolized international media coverage.

Asked on the choice of day, Medvedev smiled and asked jokingly, "You think it was blackmail?" he said, using the English word.

He said he had had to rework the text of the address himself and was so busy that he simply forgot about the U.S. elections, drawing laughter from the audience, which was made up of members of the U.S. foreign policy community, including former national security adviser Brent Scowcroft. NTV television showed Finance Minister Alexei Kudrin and billionaire Mikhail Fridman sitting in the audience.

Medvedev said, "never say never," in English again, when asked about the prospects of Russia's membership in NATO but indicated that hopes, if any, were very distant.