TRADEUS and Russia Conclude Bilateral NegotiationsOn Nov. 11th, the US and Russia finalized a bilateral trade agreement that would pave the way to Russia joining the World Trade Organization (WTO). The two countries signed a formal document at the Asia-Pacific Economic Cooperation forum in Vietnam. US Trade Representative Susan Schwab said the agreement "is a clear indication of Russia's efforts to participate fully in and benefit from the rules-based global trading system." The negotiations had dragged on since 1994 as the two sides argued over the import of American agricultural products, the piracy of US intellectual property, and access to the Russian banking and insurance sectors for American companies, among other issues. Congressional action is ultimately necessary to enable the United States to grant Permanent Normal Trade Relations (PNTR) to Russia. Congress will most likely vote on Russia PNTR in 2007. As part of the deal, Russia pledged to cut import tariffs on a range of goods - including aircraft, computer technology, agriculture and machinery. Schwab said that while talks with Russia on the piracy question would continue at the stage of multilateral negotiations, she expressed satisfaction with Russia's progress: "We believe that the bilateral agreement is very good." Before it can join the WTO, Russia must consolidate the bilateral agreements it has forged with 57 countries, which should be done by the middle of next year. After that, the WTO needs to vote to approve its membership. Russia is currently a $2 to $3 billion market annually for US industrial and consumer goods and is one of our fastest growing markets. US Urged to Confront ChinaIn a recent report published by the US-China Economic and Security Review Commission, Chairman Larry Wortzel called on the United States government to take stronger action to ensure China lives up to its trade obligations. The Commission was set up five years ago to advise Congress on trade policy with China. "China's failure to stop piracy and counterfeiting of US goods and its manipulation of its currency are two examples of how it is shirking the rules it agreed to follow when it joined the World Trade Organization five years ago," Wortzel said. "The United States is partly to blame because it has been far too tolerant of China's failure to play by the rules," Commission Vice Chairman Carolyn Bartholomew added. The commission's report includes recommendations that Congress increase pressure on the Bush Administration to file cases against China at the World Trade Organization for manipulating its currency and failing to stop piracy and counterfeiting. The two commissioners said they had been briefing congressional leaders and key committees on their report and expected trade relations with China to be a major issue next year and leading up to the 2008 US elections. China's trade with both the United States and the European Union passed the $200 billion mark in the first 10 months of this year, according to the latest statistics from the General Administration of Customs. The EU remained China's largest trading partner during the period, with a trade volume of $218.9 billion, up 24.2%. The US came second with a trade volume of $214.52 billion, up 24.6%. US and Korea FTA Moving ForwardThe United States and South Korea ended the fourth round of Free Trade Agreement (FTA) negotiations in Korea, but it is unlikely that both sides will complete FTA talks in 2006. Assistant United States Trade Representative (AUSTR) for Japan, Korea and APEC Affairs Wendy Cutler expressed optimism that a deal can be achieved, but "hard work and challenges" still remain. Korean lead-negotiator Ambassador Kim Jong-hoon stated that both sides have made "practical progress," and that the fourth round "laid the groundwork for accelerated progress." The parties will meet for the fifth round of negotiations in the United States in early December or January. Prior to the fourth round, Cutler announced that the United States would provide improved negotiating offers in industrial goods, textiles and agriculture. According to Cutler, the United States proposed shorter timeframes for tariff elimination on industrial goods, including the immediate elimination of tariffs on 1000 industrial goods such as flat-panel television sets, mobile phones, auto parts, toys and shoes. An agreement would slash tariffs and subsidies on a wide range of goods and services between the two nations, which already do $72 billion of business a year. If successful, this pact would be the biggest for Washington since the North American Free Trade Agreement (NAFTA) in 1993. US-Malaysia FTA Update US and Malaysian officials met in Kuala Lumpur for the third round of Free Trade Agreement (FTA) negotiations. Negotiators from both sides noted that the countries made good progress in advancing the bilateral deal, but some US officials warned that negotiations may fail to meet USTR's spring 2007 deadline to sign the agreement. Assistant United States Trade Representative (AUSTR) for Asia-Pacific Barbara Weisel stated that the United States and Malaysia could finish FTA talks by early 2007, but that substantial contentious issues remain. She stated that the United States will "have to see as the process continues whether or not we can conclude negotiations in time." USTR has stated that it must have all FTAs completed before April 1, 2007, in order to notify Congress of the President's intent to sign the agreement before TPA expires.
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