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. Last Updated: 07/27/2016

Somers: Market Status Likely Soon

Within a month the U.S. government will likely award Russia something it has been pursuing for nearly a decade -- market economy status, according to the American Chamber of Commerce.

AmCham president for Russia, Andrew Somers, told reporters Friday he believed the upgrade, which would ease Russia's entry into the World Trade Organization and strengthen its legal hand in international trade disputes, would be announced ahead of U.S. President George W. Bush's scheduled visit to Moscow and St. Petersburg from May 23 to 26.

"It is plain obvious that it is the market, not the government, that is the main regulator of the economy in Russia," Somers said. "We feel very strongly that in Russia major resources are located and distributed by the market and all companies, whether Russian or foreign, are operating by market principles."

Somers' remarks were echoed by his European counterparts, who urged the European Union to act quickly.

"It is only fair to recognize the facts and grant Russia the status of market economy," said European Business Club president Seppo Remes. "Sooner or later it will happen. ... It is just a question of time, but we think that it should happen now," he said.

Remes added, however, that while the United States may indeed be ready to officially recognize Russia as a market economy, the European Commission and the individual governments that make up the European Union are still divided on the issue.

"We are not so strong [that we] can tell the European Commission what it should do," he said. "It is up to politicians to make the final decision."

Remes said the EU only has one reason to withhold market economy status for Russia -- to protect its own industries.

"There are only excuses, the main one among which is protectionism," he said.

A spokeswoman for the European Commission in Russia said in an interview Friday that one of the biggest problems the EU has with declaring Russia a market economy is its two-tier energy prices, which it calls an indirect subsidy.

"Domestic and international prices cannot be so different, and with such a situation you cannot evaluate trade measures on the basis of a market economy," the spokeswoman said, adding that the EU was looking closely at the issue but it was hard to tell when a decision might be made.

"Russia is no longer a country with a centrally planned economy. Active reforms helped Russia to become a market economy, though the restructuring process should go on," said Andrea von Knoop, who chairs the board of the Union of German Businesses in Russia.

Stephen Moosbrugger, co-chairman of the Foreign Investment Advisory Council, a group of some two dozen foreign firms with major long-term investments in the country, said it was time "to bring more recognition of this fact and to reinforce the message to the outside world that Russia is already a market economy."

Moosbrugger said most opposition to Russia being declared a market economy comes from companies that have never done business here.

To counter this, von Knoop said, Russia should do more to promote its economic successes abroad.

Indeed, Somers said, he was asked during a recent trip to Washington how he could bring his family to such a dangerous place as Moscow, and whether or not he carried a shotgun with him when he is here.