Author`s name Dmitry Sudakov

Saudi Arabia puts a spoke in Russia’s wheel

Consultations at the talks on Russia’s entry into the WTO finished so depressingly that Russian delegates have revealed the essence of the bilateral negotiations for the first time. It is not the attitude of Georgia, but that of Saudi Arabia that turned out to be the major impediment.

In order to put Russian petrochemical companies under equal conditions with foreign companies Russia has to push home prices on fuel towards the global level, Saudis demanded.

Since it is not for state-run companies to determine the formation of crude prices in Russia, the claim of Saudi Arabia refers to the pricing policy of Gazprom.

“Such claims seem to be groundless,” the head of the Russian delegation Maxim Medvedkov stated after the talks which ended May 29. The official still hopes that they will manage to solve the problem in early June of 2008 in Riyadh during the talks with Russia’s Finance Minister Alexei Kudrin.

The claim to raise the home gas prices appeared as soon as Saudi Arabia became a member of the working group, members of the talks said. However, the Russian delegation decided to publicize it despite the common practice.

In 2005 Saudi Arabia came under pressure from the USA that brought forward similar claims – to increase the internal prices of raw materials for export-oriented oil companies. The USA was blocking the negotiations until Saudi Arabia agreed. Now Saudi Arabia demands the same from Russia.

Apart from the problems with Saudi Arabia, a number of unsolved issues still remains: export duties on Russian timber, that Scandinavian countries protest, and the amount of direct state allocations to Russian agricultural makers. Russia insisted on nine billion a year, the EU demanded to lower it to 3.5 billion.

The talks with Georgia reached a complete deadlock – political demands of this country cannot be solved at the WTO negotiations, since the Russian delegation has no mandate for such negotiations.

Source: agencies

Translated by Julia Bulygina

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