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. Last Updated: 07/27/2016

EC - Russia Trade Talks Delayed

European Community plans to impose import restrictions against cheap Russian imports are blocking progress on a general trade agreement between Moscow and Brussels, a top EC official announced Monday.


Sir Leon Brittan, EC commissioner for external economic relations, said at a press briefing in Moscow that negotiations over the weekend with Russian Deputy Prime Minister Alexander Shokhin had failed to make enough progress to enable the sides to sign a Partnership and Cooperation Agreement with Russia later this month as planned.


He said that talks were delayed because Russia would not agree to a clause giving the EC the right to impose special trade sanctions against Russia. The EC, said Brittan, "is not ready to treat Russia as if it was a normal market economy in all aspects". Brittan said Russian firms sold at below cost, partly because of artificially low energy prices.


Russian Prime Minister Viktor Chernomyrdin told Brittan at talks Monday that "Russia would like to see trade discrimination gradually disappear", according to Itar-Tass.


Brittan said that trade restrictions against Russia could be lifted "only after the requirements of General Agreement on Tariffs and Trade have been met". These would force Russia to raise domestic energy and commodity prices, and introduce long-term accounting standards, a move opposed by Russia's exporters.


The agreement between the European Community and Russia will likely include promises of technical assistance from the EC for privatization, annual top level meetings between the EC and Russia, and a clause promising a review of the agreement to include a free trade area - sometime in the future.


Brittan said the EC was the only world trading partner of Russia to even offer the prospect of free trade. "The EC is in no sense closed to Russian exports, and does not wish to be".


While Russian ministers have complained bitterly in recent months of the European trade barriers to Russian metals, nuclear fuel, chemicals, textiles and fish, Brittan said that the EC had reduced restrictions to a level where the average EC tariff is now 0. 65 percent, against an average Russian tariff on EC exports of 15 percent. He did not mention the quantitative restrictions the EC imposes on some imports.


Brussels is also talking with Russia on trade access for Russian textiles and nuclear fuel, Brittan said. The two countries had agreed this weekend to give Russian satellite launchers access to the world market, where they would compete with the European Ariane rocket system.


Brittan said that Russia and the EC agreed in principle that Russia could launch 12 satellites for Western companies between 1995 and 2000.


Brittan did not give details on the agreement, such as whether Russia had agreed not to strongly undercut Western competitors, but said it followed a deal soon to be struck between the United States and Russia. Russian officials have said the terms of the U. S. deal are still under discussion.