Doing Business

President George W. Bush and President Vladimir Putin recently agreed to a long-delayed trade deal to allow Russia to proceed with entry to the World Trade Organization. They had hoped to ink the deal at the G8 summit in St. Petersburg in July, but finally reached agreement in Vietnam last month. NEWSWEEK’s Richard Wolffe spoke with Dorothy Dwoskin, the Assistant United States Trade Representative about the negotiations and what the deal means. Excerpts:

NEWSWEEK: Why does the Russian deal make sense for Americans?

DWOSKIN: Russia joining the WTO imposes a certain amount of predictability and certainty in how Russia will treat U.S. exports of goods and services to the Russian market. You have a guarantee of what the tariffs will be. You have a guarantee of the rules that will be applied. When you join the WTO, you have to treat people on a non-discriminatory basis.

This deal has been in the works for a long time. What were the stumbling blocks?

The accession process takes a long time because it’s all about a country transforming its trade regime and there are certain aspects to it. One is how you are going to treat goods and services in terms of market opening. Another is how you are going to change your trade regime to come into compliance with international rules.

Dorothy Dwoskin

In terms of the Russian situation, one of the issues for us was: how are products were going to be treated in the market. In particular, we have a big interest in Russia as a destination for our agricultural exports and yet Russia isn’t following international norms in its agricultural regime. That became a pretty big sticking point and we worked with the Russian negotiators to address concerns, particularly with livestock.

Are you talking about poultry?

Poultry, beef and pork.

What problems are there for someone selling poultry to Russia?

For example, the bilateral agreement sets out the means by which people can go through the inspection process in order to export to Russia. Before the bilateral, our officials in the United States and Russian officials jointly inspected all facilities that wanted to export.  It was a long and cumbersome process that prevented exports from new U.S. plants. We have a good process now that gives our officials the authorization to certify U.S. facilities.

We sell a tremendous amount of poultry into the Russian market and some might perceive there was a problem in terms of the system being perhaps manipulated. I think we now have a lot of certainty in how the inspection process is to work and that is something that our poultry exporters were very, very interested in.

Didn’t the Russians accuse American exporters at one point of selling “bad” chickens to Russia?

You have to talk to the Russian authorities about that. We sell into the Russian market the same kind of products we sell to American consumers in the United States.

Does the agreement now go to the WTO for approval?

It’s important to understand the accession process is a two-track process. On the one hand you have to do these bilateral market access agreements with the members of the WTO that request them. The other is to ensure that multilateral rules are adhered to.

Do agricultural goods dominate trade between the United States and Russia?

We are a big agricultural exporter. Russia is a $1 billion export marker for our agricultural products. It’s a $2-to-$3 billion market for industrial and consumer goods, and one of our fastest growing markets. So we do cover the waterfront in the negotiations with the Russians.

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