Russia and the United States pressed on with marathon talks on Friday aimed at reaching agreement ahead of a Group of Eight summit on Russia's bid to join the World Trade Organisation. The Kremlin is keen for a deal before the weekend G8 summit in St Petersburg, where President Vladimir Putin will host world leaders including George W. Bush.
The WTO negotiations went into a third day on Friday morning in Moscow but broke off for the delegation heads - US Trade Representative Susan Schwab and Russian Economy Minister German Gref - to fly to St Petersburg to continue talking.
"We are going to continue to negotiate throughout the day," Schwab's spokesman Sean Spicer said. "There are still several issues that are unresolved."
The talks reached a breakthrough on Thursday on financial services and were progressing on protection of intellectual property rights. But the going was tough on opening the Russian market to US farm produce, sources on both sides said.
The talks were up against the clock. Putin was due to host Bush on Friday evening for an informal barbecue and the two hold a working meeting on Saturday morning where they could sign a bilateral deal.
NOT AT ANY PRICE: Russia is the biggest economy outside the 149-nation trade body and a bilateral accord with the United States would clear one of the last major obstacles to Moscow's WTO bid, although final formalities could take several months.
A deal would kick-start the G8 summit, where Putin wants to showcase Russia's recovery from its financial crash of 1998. Flush with oil cash, Russia has agreed to repay its Soviet-era debts and has just made the rouble convertible. A Russian diplomat said, however, that the US was setting tough demands and Russia would not sign a deal at any price.
"It's very important for Russia, provided the price of the entry ticket is right," Andrei Kondakov, a senior Foreign Ministry official responsible for G8 matters told Reuters. Kondakov complained extra obligations were being placed on Russia beyond the normal criteria for WTO membership,
"We are not particular fans of WTO plus commitments going beyond the regular terms of membership of the WTO," Kondakov added. "It appears that our partners are still trying to push us beyond regular membership commitments."
Russia has sought entry to the WTO for more than a decade and the talks with the US have whittled down the outstanding issues to access for farm produce to the Russian market and protecting intellectual property rights.
Finance Minister Alexei Kudrin said on Thursday that the two sides had achieved a breakthrough when Washington dropped a demand that foreign banks be allowed to open branches in Russia. One US banker applauded the concession, saying the existing requirement to open subsidiaries in Russia had not been an obstacle to his business. "It was a tempest in a teacup," the banker said.