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Russia/U.S.: Gore-Chernomyrdin Talks Underscore Different Agendas

Moscow, 24 September 1997 (RFE/RL) - Russian Prime Minister Viktor Chernomyrdin and U.S. Vice President Al Gore have wrapped up three days of talks in Moscow announcing a landmark nuclear deal, but the meeting seemed only to highlight stark differences on a range of bilateral economic and security issues.

While the Western media hailed the inking of a U.S-Russian agreement to halt production of plutonium, the Russian media focused on Washington's continuing trade restrictions against Moscow.

The talks were part of the ninth session of the Gore-Chernomyrdin commission, set up to discuss bilateral issues and strengthen commercial links. The bi-annual meetings have steadily grown into a public relations event for both Gore and Chernomyrdin, both likely presidential candidates in the year 2000, to display their statesmen-like skills.

Those efforts were boosted with news of an accord to halt production of plutonium, which calls for Washington to provide $70 million to Moscow to convert three nuclear reactors to civilian use by 2000.

But on many other tough issues, both sides agreed to simply to continue a dialogue.

For Moscow, the key problem is what it sees as Washington's discriminatory trade policies towards Russian goods. The Kremlin issued a statement following talks between Gore and Yeltsin yesterday saying the Russian president had stressed his concerns over the Jackson-Vanik amendment, a hangover from the Cold War which restricts trade due to Russia's immigration policy.

Yeltsin also complained about that the U.S. is continuing to treat Russia as a "non-market economy," a technical status used in trade disputes. Moscow says it has left Russia vulnerable to charges that it is dumping goods in the U.S. market at below production costs.

As a non-market economy, Russia is not allowed to present its own data to resolve dumping complaints. Instead dumping duties are calculated on data from third countries. Trade officials in Moscow say Russia loses more than $1 billion a year because of anti-dumping duties.

Gore yesterday promised to review U.S. legislation that treats Russia as a non-market economy, saying: "obviously Russia has a market economy." But he noted that changing the status would not prevent the U.S. from lodging dumping complaints. He also said Russia needs to push through tax reform, protect intellectual property rights and fight corruption.

Chernomyrdin said trade restrictions were a focus of the talks, but acknowledged that not much progress had been made.

The Russian media, meanwhile, tended to downplay the Gore-Chernomyrdin meeting and zeroed in on trade disputes rather than the nuclear deal. Russia's "Kommersant Daily" noted: "Gore said Russia was a market economy, but this, obviously, is not enough." Russian television called the talks unsuccessful because no progress was made on lifting U.S. trade restrictions against Russian goods.

For the U.S., one of the most important economic issues is liberalizing conditions for foreign investment in Russia's lucrative oil industry. The Russian government has recently revoked a tender won by U.S. oil major Exxon to develop the Arctic oil field of Timon Pechora.

Much to Exxon's dismay, the project had not received parliamentary approval as a "production sharing agreement," which would set out more favorable investment and tax terms. Moscow revoked the tender results allegedly because Exxon had refused to work on the project without the special terms.

One result of the Gore-Chernomyrdin talks was the establishment of a joint commission to protect investors' rights and resolve disputes like the one involving Exxon. It is unclear whether the new commission will resolve the Exxon dispute, though, as Chernomyrdin shifted the blame to the opposition-dominated State Duma.

"The government has submitted more than 130 projects to be carried out in accordance with the law on production sharing agreements. But so far the Duma has adopted only seven projects," said Chernomyrdin.

Despite bilateral differences of opinion on trade and investment, Gore sounded an upbeat tone, predicting a surge in investment in Russia in the months and years ahead.