Russia gets EU deal on WTO, backs Kyoto

Russia yesterday secured a deal with the European Union on terms for its entry into the World Trade Organisation (WTO) - and immediately rewarded the bloc by promising to back a worldwide environmental pact.

Both sides acknowledged making concessions to clinch a deal to boost President Vladimir Putin's goal of agreeing entry terms by the end of 2004. That would crown six years of talks to make Russia the WTO's 148th member - the last big economy to join.

EU Trade Commissioner Pascal Lamy and Russian Trade Minister German Gref signed the accord in the Kremlin and Mr Putin immediately said Russia would back the Kyoto protocol on global warming, support eagerly awaited by his EU partners.

Linking the two issues, Mr Putin said: "It is true that the European Union has met us half-way on certain issues during the WTO negotiations.

"This cannot but have a positive effect on our position on the Kyoto protocol. We will speed up Russia's moves towards ratifying the protocol... We clearly set out our position on Kyoto long ago. We are for the Kyoto process and we support it."

But Russia, he said, remained concerned over problems posed by a combination of EU enlargement, WTO membership and joining the Kyoto protocol. And Mr Putin carefully avoided any commitments as to when the ratification could happen.

"I cannot say how things will be 100 per cent, because ratification is not an issue for the president but for parliament, but we will speed up this process," said Mr Putin, who toughly controls the Russian legislature.

Irish Prime Minister Bertie Ahern, the current EU chairman, said he was encouraged by Mr Putin's comments.

"I know that we can keep on working on the issue so that we will come to a successful conclusion," he told reporters.

The fate of the Kyoto protocol has depended on Russian approval since Washington pulled out in 2001, since it cannot come into force without the backing of developed nations responsible for 55 per cent of greenhouse gas emissions.

Prospects for Russia supporting the protocol had faded after top officials and scientists had advised against it.

Russia has been convulsed by months of debate on Kyoto, with persistent coaxing from the EU, whose members account for more than half of Moscow's foreign trade.

Contentious issues - human rights, media freedoms and the bid to crush Chechen separatism - faded into the background.

The summit was the first since the EU embraced 10 new members, including eight which were in Moscow's sphere of influence until the fall of communism, and EU officials talk of a new maturity in an ever closer relationship with Russia.

European Commission President Romano Prodi said the WTO agreement was clinched as both sides "moved to take into account important political and economic sensitivities".

Analysts portrayed the deal with the EU as a crucial milestone, since Moscow has yet to strike similar deals with other WTO members such as the United States.

With hours to go before the summit, differences over 160 issues had been boiled down to three or four, with much haggling over the liberalisation of Russia's huge natural gas sector.

An EU statement after the signature of the deal said Russia had agreed to gradually raise domestic gas prices for industrial users to pave the way for WTO membership - rising by a third or even a half by 2006 and doubling by 2010.

The trading bloc has long demanded Russia boost domestic prices - one-fifth of export prices - on the grounds it gives Russian companies an unfair advantage.

Even though a trade deal has now been struck, investors hungry for a slice of Russia's economy will have to wait a little longer before they can rely on WTO rules to cover them.

And Russia has yet to conclude deals with other WTO members, including the United States.