by Sebastian Smith
Tue Sep 5, 1:20 PM ET
Russia, the only major world economy not in the World Trade Organisation, said its negotiations with the United States on joining the body were deadlocked and threatened to pull out of the talks.
"We have reached the limit, the absolute limit in our positions, and we cannot make concessions in any area," said Igor Shuvalov, a senior advisor to President Vladimir Putin and Russia's main envoy to the G8 club of rich nations.
For domestic political reasons Russia cannot give any more ground in its talks with the United States, he said.
"The government may conclude that this cycle should be started anew or suspended," Shuvalov told reporters.
Russia has campaigned for 12 years to join the WTO but the United States is still witholding its endorsement of Moscow's candidacy -- it is the only major economy that has not yet backed Russia's bid -- citing shortcomings in several key trade sectors.
Moscow wants to join the organisation both for the prestige of membership and as a means to spur diversification in its own economy, still focused heavily on raw materials export.
Russia, whose hopes of winning US approval for its WTO bid in time for the G8 summmit in Saint Petersburg in July were dashed after intense negotiation, has signalled in the past that it may opt out of the WTO if it judges the cost of membership too high.
Putin in March accused the United States of resurrecting issues he said had long since been resolved, and top Russian officials have said Washington is trying to use Moscow's WTO aspirations for political leverage.
As he prepared to host the other G8 leaders, Putin warned on July 4 that Russia would stop abiding by WTO trade rules, as it claims it has voluntarily done for years, if it was not admitted to the organization.
"If for some reason we cannot reach agreement" on WTO membership, "we will no longer be responsible under accords that we have not only approved but that we are fulfilling, despite the fact that we are not a member of this organization," he said.
Russian media also indicated ahead of the G8 summit that Russia was prepared to block US energy majors from a share in development of its huge Shtokman natural gas field in the Barents Sea if Washington's approval for WTO membership was not forthcoming.
Shuvalov insisted however that the inclusion or exclusion of US firms -- Chevron and ConocoPhillips are on the short list -- in the Shtokman project had nothing to do with politics or Russia's inclusion in the WTO.
"It is not connected to good or bad relations between the US and Russia," he said. "I think there are a lot of other factors that are starting to play a role."
Referring to Russia's state-run gas supplier that will oversee the Shtokman project, he added: "I think Gazprom will take a decision balancing all aspects" of the requirements for the project.
In an interview on July 14, Shuvalov warned that Western efforts to pressure Russia and keep it out of the WTO are sure to backfire.
"Russians are completely different people. The more they put pressure on us, the more we will resist them and do the opposite," he said on the eve of the G8 summit in Saint Petersburg.