Shoes, Other Feet, Fits

EU unilaterally blocking Russia’s entry into the very very multilateral WTO.

How many poles is this multipolar thing going to have, anyway?

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Putin Doesn’t Like EU Terms for Entry
October 9, 2003
By Natalya Shurmina

YEKATERINBURG, Russia (Reuters) – President Vladimir Putin sharply
criticized European Union “bureaucrats” on Thursday for pressing the
country to raise domestic energy prices as a condition for joining the
World Trade Organization.

“We cannot move to world energy prices in a single day. It will ruin the
country’s economy. Eurobureaucrats either do not understand this or are
trying to impose conditions which are unacceptable for Russia’s entry to
WTO,” Putin told a Russian-German summit meeting in the Urals.

“Such a tough position toward Russia is unjustified and dishonest. We view
this as an attempt at arm-twisting.”

European Union trade negotiators say low gas prices give Russian industrial
exporters an unfair advantage over foreign markets and distort trade.

Russia has been negotiating WTO entry for more than a decade. Putin has
made joining the trade club one of his government’s priorities.

Economy Minister German Gref, addressing Russian and German businessmen on
the sidelines of the summit, said WTO entry talks had hit deadlock —
partly because of energy prices.

“Negotiations are proceeding with considerable difficulty. They are
deadlocked,” Russian news agencies quoted Gref as saying. He was referring
to his meeting in Brussels this week with European Trade Commissioner
Pascal Lamy.

But a ministry spokesman said Deputy Economy Minister Maxim Medvedkov still
intended to attend a Geneva meeting of a working group on overall
negotiations on WTO entry, set for October 27-30.

“If something slows down in talks with the EU, it does not mean all work
slows down,” he told Reuters in Moscow.

ENERGY PRICES

Gas prices charged to Russian domestic and industrial users are far below
world levels. Under proposed but repeatedly delayed reforms of gas monopoly
Gazprom, the government plans to raise them gradually.

Prices, however, cannot be pushed up to world levels because Gazprom’s
transportation costs, factored into European gas prices, are considerably
lower on the home market. Europe receives a quarter of its gas supplies
from Russia.

Gazprom effectively subsidises the rest of the economy with its low prices.

Russia’s national power utility, UES, Gazprom’s main consumer, plans to
raise electricity prices in line with inflation, but also plans to launch a
free power market.

“Our position here is not obstinate,” Putin said. “We understand that
sooner or later we must introduce world prices inside the country. But we
intend to do it gradually.”

Putin said Russia, which received its first investment grade from Moody’s
Investor Service Wednesday, had become a stable country — a fact the
European Union should appreciate.

“Russia’s main advantage today is its political and macroeconomic
stability,” Putin said. “If we move to world energy prices macroeconomic
stability will be undermined.”

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Putin’s demonstrating an almost Brusseles-esque use of the word “gradually.” As in gradually phasing out subsidies, gradually limiting the market distortions of the CAP, gradually …

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