Russia's presidency of the Group of Eight (G8) this year will
end with Moscow making a successful thrust of initiatives on the
world stage, most notably the discussion of energy security.
Russia's economic growth has averaged at nearly 7 percent and
foreign direct investment has soared over the last few years. When
President Vladimir Putin hosted other G8 leaders in his hometown of
St Petersburg, Russia had an unprecedented opportunity to showcase
its economic rise and deflect criticism against it.
Energy security became the catchword when Russia, the world's
second largest oil exporter and No.1 in natural gas reserves,
chaired the G8, a group of the world's industrialized nations, at a
time of sky-high oil and gas prices. Energy security was listed as
a top priority, along with education and fighting infectious
diseases, for discussion during Russia's first-ever presidency.
"We stressed that open, transparent, efficient and competitive
energy markets are the cornerstone of our common energy security
strategy," G8 leaders said in the chair's summary.
In an action plan to enhance global energy security, the leaders
"undertook to reduce barriers to energy investment and trade,
making it possible for companies from energy producing and energy
consuming countries to invest in and acquire upstream and
downstream assets internationally."
European countries jittered when, at the start of the year,
Russia cut off gas to neighboring Ukraine amid a bitter pricing
dispute, briefly disrupting supplies to Europe as most of the gas
Russia sends to Europe is shipped through pipelines that cross
Ukraine.
The European Union (EU), which depends on Russian supplies for
one quarter of its oil and gas needs, has been keen to formulate
new principles of energy cooperation with Russia. However, EU
leaders have failed so far to persuade Russia to commit to the
Energy Charter, a document that regulates transit and investment in
the energy sector and allows for greater market competition from
foreign companies.
Russia, while pledging reliable supplies, demanded reciprocal
moves for opening up its energy assets to European investors.
"Russia's desire to take ownership stakes in Europe's gas
distribution markets makes perfect sense and is fully legitimate
given Russia's energy assets and pipeline capacity," Masha Lipman,
an analyst at the Carnegie Moscow Center, said in an article.
WTO deal
When Putin met with US President George W. Bush in St
Petersburg, hopes ran high that the two countries would seal a deal
on Russia's longtime bid to join the World Trade Organization (WTO)
at the G8 meeting.
That deal did not come, highlighting difficulties in the
talks.
However, at their meeting later this year when Bush made a
refueling stopover in Moscow en route to Asia in November, both
leaders confirmed they were going to sign a deal on Russia's WTO
membership.
The accord, signed in Vietnam on the sidelines of the 14th
Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Informal
Meeting where Putin and Bush met again, capped marathon talks that
had hit snags on financial services and farm produce, and it
removed the last major hurdle in Russia's accession to the
organization.
US Ambassador to Russia William Burns, writing in The Moscow
Times daily newspaper, hailed the bilateral WTO agreement as "the
single biggest achievement in economic relations between our two
countries in over a decade."
In two meetings in the past month, the two leaders "have
demonstrated a clear appreciation of the fact that the United
States and Russia matter to each other and that a healthy
relationship between them matters to the rest of the world," Burns
wrote.
With the US deal, Russia, the largest economy still outside the
Geneva-based world trade body, moved closer to WTO membership, but
it has yet to complete talks with the former Soviet republics of
Georgia and Moldova.
Georgia, which signed a deal with Russia in May 2004, announced
in July this year that it would renegotiate the terms with Moscow.
The Caucasus nation insisted on legalizing customs checkpoints on a
certain section of its border with Russia before Tbilisi backed
Moscow's WTO bid.
Moldova and Russia are expected to sign the agreement by the
year end after Russia agreed to lift its ban on Moldovan wine and
meat imports.
Economic Development and Trade Minister German Gref said last
month that Russia might complete all required procedures and join
the WTO next year.
EU ties
If the US agreement on WTO accession can be reckoned as a major
achievement for Moscow, then ties between the EU and Russia needed
some extra work to move forward.
Russia and the EU signed an agreement that eased visa rules at
the Sochi summit in May. The visa agreement would facilitate the
issuing of short-stay visas for some Russian and EU citizens,
including students, civil servants, culture workers and
journalists.
But the 25-member alliance failed to start negotiations on a
new, more ambitious cooperation agreement with Russia at the
EU-Russia summit in October because of Poland's veto. The
negotiation mandate requires the unanimous approval of all EU
member countries.
Warsaw demanded that Moscow lift its year-long ban on Polish
meat imports, saying the restriction was politically motivated. But
Russia maintained that the embargo had been imposed over food
safety worries.
The Polish stance has disappointed other EU members and drawn
criticism from Kremlin officials, but Moscow said it was ready to
launch the talks at any time.
Russia "will be patient to wait for" the EU to get a mandate,
Putin said after the summit in Finland, which holds the current EU
presidency.
The new pact will focus on wide-ranging areas such as energy,
trade, investment and human rights, and aims to replace the current
decade-old agreement on partnership and cooperation that expires
next year. The existing deal would remain in force until anew deal
is reached.
But there were things that did move forward.
At the Helsinki summit, the EU succeeded in persuading Russia to
phase out charges on European airlines for flying over Siberia by
the end of 2013, settling a two-decade-old dispute over the
matter.
European carriers pay more than € 330 million (about US$440
million) annually in charges for flying over Siberia.
(Xinhua News Agency December 15, 2006)
