Roubles on the trade agenda

By FRAN O'SULLIVAN in Santiago

New Zealand and Russia are on the verge of forming a stronger trading relationship, but moves are likely to stop short of a full free trade deal until Russia becomes a member of the World Trade Organisation.

Prime Minister Helen Clark told the Herald she intended to use the opportunity of the Apec leaders meeting in Santiago to speak about the prospect with Russian President Vladimir Putin if she got the chance today.

"We've been looking at the relationship and what we may be missing out on as Russia grows and expands," she said.

"We might be able to do a bit more of a review of where trade is at and look to see if there is some room for scientific collaboration and with students."

Russian Economic Development and Trade Minister Herman Gref and Trade Negotiations Minister Jim Sutton are understood to have discussed closer co-operation during a series of meetings on the outskirts of the Apec summit.

Sources said their talks could ultimately form the basis for a Trade and Economic Framework agreement.

Yesterday, the pair signed an accession protocol on services to assist Russia's bid for membership of the WTO and agreed to combine forces to fight against agricultural export subsidies. Details are expected to be released in Wellington this week.

In an exclusive interview with the Herald, Gref confirmed that Russia was looking to forge closer trade relations with New Zealand.

"We have already come to terms in order pursue a common joint action plan after Russia's accession to the WTO and we are grateful to counterparts for the actions here," he said.

"We have removed or set aside all the disputable questions we had and we have signed a protocol with New Zealand on services on the accession of Russia to the WTO.

"We can see that the approaches of Russia and New Zealand in trade and economic intercourse overlap quite seriously."

Sutton later played down the comments, calling the approach an action plan.

"I would describe it as we have formed a common cause."

The move towards forging stronger trade ties with Russia follows Saturday's announcement that New Zealand and China will shortly begin negotiations on a free trade deal - the first such negotiations undertaken by China with a developed Western country.

New Zealand was the first country to complete negotiations with Russia on its goods protocol for WTO accession this year.

Former WTO Director-General Mike Moore, who acts as a Trade Envoy for New Zealand, and WTO ambassador Tim Groser conceived a strategy for New Zealand to be the first country to agree an accession protocol with Russia.

"We did it, one to give us a first-mover advantage, and two because we support their accession and helped to get that moving. It was a bit static at that stage," said Sutton.

"It's too soon to say we'll be the first ever to do a bilateral free trade agreement with Russia. They certainly have to get into the WTO first."

He expected Russia to join the fight against agricultural subsidies once its WTO membership was confirmed.

"It'll be good to get them into the WTO - they will be another voice against export subsidies," he said.

Clark did not get an opportunity to talk directly to Putin during the the opening session of the Apec leaders meeting yesterday.

Putin - who is on a tight timetable - did not have a formal meeting scheduled with her.

Before Apec, Clark said she had formed a bond with Putin at last year's meeting where they sat next to each other.

Russia's chief trade negotiator, Maxim Medvedkov, praised New Zealand's pragmatic approach to his country's WTO membership bid.