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. Last Updated: 07/27/2016

U.S.: Russia Shielding Telecoms

The government appears to want to raise the cost to foreigners of investing in its outdated telecoms industry as it readies to join the World Trade Organization, a United States government official said Thursday.

"In telecommunications they are backtracking. ... There is reluctance to even lock in what is current practice," said the official, who was in Moscow to meet government officials and business leaders.

The remarks echoed fears expressed by a European Union official Wednesday that Russia appeared to be determined to erect higher protective barriers to shield its telecoms, automotive and service industries from outside competition.

But the tone of U.S. criticism of Russian trade policy appeared less strident, possibly reflecting Washington's desire to avoid ruffling feathers as it seeks to enlist Moscow's support over Iraq, said analysts.

The U.S. official, who identified services and agriculture as major stumbling blocks in WTO talks, was reluctant to give a target date for Russia's entry. "I think the Russians will accede when they are ready," the official said.

Russia's tougher line on telecommunications was puzzling because the country says it needs $30 billion to upgrade the industry in coming years, said the U.S. official.

The U.S. official also called on Russia to open up its financial services industry, including insurance, to competition.

But Russia is not being asked to sweep away all barriers to trade the very day it joins the WTO.

"One of the great myths is that Russia joins the WTO and 'boom', its markets are completely open and tariffs are eliminated," said the official.