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. Last Updated: 07/27/2016

Savings Vote Set

Europe's blue-and-gold emblem once appeared on the door of every Moscow food shop, a symbol of charity to an impoverished country with nothing on the shelves.


But the food aid of 1992, when half-a-billion dollars worth of European milk and meat arrived in truckloads to fill Russia's empty shops, is just an embarrassing memory now.


Russia seeks partnership with Europe -- equal treatment and fair market access within a broad framework of cooperation.


"Russia has already taken a step towards Western Europe and we hope that in the future we can broaden this economic potential and move closer to Western European countries," a senior Foreign Ministry official said in an interview.


"The latest agreements provide a solid legal basis for trade and other relationships between our countries."


Russia's new relationship with Europe is defined in detail in an 87-page agreement on partnership and cooperation signed by President Boris Yeltsin on the Greek island of Corfu last month.


It deals with issues ranging from space to banks and financial services, outlining in wordy legal language the obligations of both sides and the safeguards which come into force if things go wrong.


"Negotiations were long, but not long by the standards of the Uruguay Round" of world trade talks, said Michael Emerson, the European Union's ambassador to Russia.


"Clearly we had a number of chunky problems. But now we are talking about dozens of pages of tightly negotiated, legally binding agreements dealing with rules on market access."


The new agreement pleases Moscow by recognising Russia's status as a "country in transition" -- one struggling to swap Communist central planning for a system of market economics modelled on that in the West.


But it was not an easy deal to seal. Bitter disputes about Russia's access to markets for aluminum, uranium and space technology punctuated two years of talks, while Europe demanded better access to Russia's embryonic services sector, especially banking and transport.


Exports of aluminium and uranium have risen as demand from the once all-powerful military sector tailed away.


Domestic banks demand strong protection, arguing that they cannot cope with competition from big international financial institutions.


The 12 countries of the European Union are Russia's biggest trading partners, making up some 35 percent of trade turnover.


This could rise to about 45 percent once Austria and Scandinavian countries join the European club next year.


The trade is less important for Europe in absolute terms -- EU trade with Russia of $25 billion last year compares with $250 billion for trade with Japan and the United States -- but officials say there is plenty of room for growth.


"There is huge potential for trade expansion with Russia," said Emerson. "If there is an agreement on Russia joining the General Agreement on Tariffs and Trade and a new European trade agreement these could be the instruments needed to usher in an era of new openness between Russia and Europe."


Russia, for its part, sees improving relations with Europe as a pattern for relations with other Western countries.


"We've already signed an agreement with Europe under which they have promised to scrap discriminatory practices against Russia," Yeltsin said last week. "We'd like to achieve the same thing with the Group of Seven."


But while other European states line up to join the European Union, Russian and EU officials agree that Russian membership is not on the agenda now.


"It is an academic question at the moment," the Foreign Ministry official said. "The Russian economy is not ready for full integration with Western economies now and Europe does not really have a burning desire to accept Russia as members now.


Emerson agreed. "I have been trained to never say never, but it is not a practical matter like it is for Poland."


But he added: "Who knows what the structure of Europe will look like by the year 2010. The European Union's adaption to post-Communist Europe is posing all sorts of fundamental questions which have not yet been fully answered."