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U.S., EU Reject Russian Accusations Over WTO Bid

Russian First Deputy Prime Minister Igor Shuvalov has blamed the EU and U.S. for Russia's decision to abandon unilateral talks.
PARIS (Reuters) -- The United States and the European Union have rejected Russian accusations Washington and Brussels were to blame for the collapse of Moscow's unilateral bid to join the World Trade Organization (WTO).

"We reject this claim. We have been facilitating this process. We have been helpful and very supportive of Russia's bid," Lutz Guellner, spokesman for EU Trade Commissioner Catherine Ashton, said.

Russian First Deputy Prime Minister Igor Shuvalov said in an interview on June 23 the EU and the United States were responsible for Moscow's decision to ditch unilateral talks for a joint WTO bid with Kazakhstan and Belarus.

"Let's be clear on this -- this is a Russia-created crisis and one they have to resolve," U.S. Trade Representative Ron Kirk told Reuters.

Russia, the biggest economy outside the 153-member global trade watchdog, is now negotiating entry with its former Soviet neighbors as part of a proposed new customs union.

The move, announced by Prime Minister Vladimir Putin, came just days after Russian officials had held talks with U.S. and EU trade representatives. It has left the WTO secretariat in confusion.

"This is as creative a response from Russia as the one they gave after what were very constructive and positive talks in St. Petersburg," Kirk said, referring to Shuvalov's comments and Russia's changed bid for WTO entry.

"We thought we had taken positive steps and made progress," he said.

WTO Confusion

The head of the World Trade Organization, Pascal Lamy, said it was still unclear whether Russia can join the global trade watchdog as part of a customs union.

"I would have said 'perplexity' last week and I think this week it's more like confusion," Lamy told Reuters in Paris.

"I think WTO members are still very unclear about what the next steps could be, not least because when you join the World Trade Organization you not only join the industrial or agricultural tariff part of this but you join a system of rules."

"Whether for instance this customs union has the competence to negotiate these issues is still very unclear. I think we're in for a time of serious legal poker both on the side of Russia, Kazakhstan, and Belarus and on the side of the 153 members of the World Trade Organization," he added.

Kirk and Ashton will hold bilateral talks with Russian Economy Minister Elvira Nabiullina on the sidelines of an OECD meeting on June 25 in Paris.

"We were surprised by Russia's new approach...we still need to better understand what this means for Russia's WTO accession process and what exactly Russia's intentions are," Guellner said.

"Commissioner Ashton will be seeking detailed clarification at her meeting in Paris."

16 Years

Russia has been negotiating to join the WTO for 16 years but Moscow says the United States and European Union have made unreasonable demands for entry.

Shuvalov said the leaders of Belarus and Kazakhstan were more active in pursuing the customs union with Russia than WTO negotiating partners had been in pursuing Russia's accession to the trade body.

Moscow's accession stalled after Washington put the issue on ice over its opposition to Russia's war with Georgia in 2008.

A trade spat between Moscow and Washington over a Russian ban on some U.S. meat imports, on health concerns related to the recent outbreak of the H1N1 virus -- otherwise known as swine flu -- has also hampered Russia's WTO bid.

Moves by Moscow to place duties on imports of timber and cars from the EU, and threats of further tariffs on other goods ranging from shoes to furniture, have also hurt the WTO talks.