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. Last Updated: 07/27/2016

Official: WTO Talks May Face Deadlock

The next round of bilateral negotiations with the United States on Russia's entry into the World Trade Organization is heading for a stalemate that may delay the country's membership for up to a year, a high-ranking government official warned Thursday.

"The negotiations are not at a deadlock, but they may come to a deadlock in December," the official said, speaking on condition of anonymity.

The next round of U.S.-Russian talks is scheduled for next week, when Economic Development and Trade Minister German Gref and U.S. Trade Representative Rob Portman are set to meet in Hong Kong on the sidelines of a WTO ministerial conference.

The government official identified airplane tariffs, access to financial services markets, intellectual property rights and hygiene measures for agricultural goods as the main sticking points for Russia's entry into the 148-member trade body.

"If we don't come to an agreement, then Russia's WTO entry will be postponed for six months to a year, but more likely for a year," the official said.

Russia has done all it can to accommodate foreign aircraft producers and financial services firms, whose market access remains one of the most difficult areas for reaching a compromise. It is now up to the country's foreign partners, mainly the United States, to make concessions, the source said. "We won't give up financial services and airplane tariffs," the official said.

Despite a 20 percent tariff on imported aircraft, domestic airlines buy about 60 percent of their planes abroad, the official said.

The official also said he was surprised by America's "insistence" that Russia only allow foreign banks to open branches, as opposed to subsidiaries, in the country. Other foreign partners, including Japan and Switzerland, agreed with Russia's position, the source said.

Russia and the United States, however, seem to be closer on the issue of intellectual property.

U.S. Ambassador to Russia William Burns said he was "encouraged by the concrete steps the Russian authorities are taking" to fight counterfeiting. Violators of intellectual property rights harm both Russian and foreign businesses, Burns said Thursday, speaking during a U.S.-Russian round table on intellectual property rights.

Economic Development and Trade Deputy Minister Andrei Sharonov said more than 5,000 criminal cases had been opened in connection with intellectual property rights violations since January. Twelve manufacturers of counterfeit compact discs and DVDs have been shut down and unlicensed tapes, discs and software worth nearly 400 million rubles ($13.8 million) have been seized, he said, speaking during Thursday's round table.

Joining the global trading club requires candidate countries to negotiate individually with each member nation. The United States is among a handful of WTO members, including Colombia and Australia, that have yet to bless Russia's entry. Last month, Gref predicted that Russia might join WTO by mid-2006 if talks went well. If negotiations grind to a halt, Russia will join the WTO in 2007, he said.