WASHINGTON–A push by a business group for quick United States approval to allow Russia entry into the World Trade Organization is inappropriate, officials of the American Insurance Association are cautioning.
David Snyder, an AIA vice president and assistant general counsel, said his organization is raising objections because the U.S. insurance industry doesn't want an overall cap on their access to the Russian market.
"That's the critical issue," he said.
The insurers' position runs contrary to the American Chamber of Commerce, which wrote a letter Oct. 24 to President Bush and Russian President Vladimir Putin calling for "early closure" of talks on the WTO issue.
Mr. Snyder said that while talks are making progress, a number of issues related to allowing U.S. insurance companies to do business in Russia remain unresolved.
"While we agree that we want a favorable outcome as soon as possible, there remain some issues that will involve hard negotiating," Mr. Snyder explained.
Specifically, the letter from the American Chamber of Commerce said, "As U.S.-Russia WTO bilateral negotiations continue this month, we believe early closure to be a crucial step in furthering our mutual economic interests."
Moreover, the letter said, "the prospect of Russian accession would serve as strong endorsement by both governments of accelerated trade and investment between commercial entities in the U.S. and Russia."
It was also signed by the officials of a number of multinational U.S. corporations, including General Electric, Ford, Procter & Gamble, and Dow Chemical, Wrigley and International Paper.
Responding to the letter, Mr. Snyder said, "While we agree with the desirability of that outcome, there are important issues regarding true market access in insurance that remain to be satisfactorily resolved."
He added that the AIA and its members "hope our negotiators will continue to push hard for a commercially meaningful agreement that does not establish any negative precedents for future negotiations on issues such as overall caps on foreign participation in the market."
Regarding insurance, Mr. Snyder said the Russians have made significant concessions. Specifically, they have agreed to allow U.S. insurers to branch into Russia without the need to set up a local company; agreed to the elimination of restrictions on the percentage of a Russian company that can be foreign-owned; and have agreed to eliminate restrictions on writing compulsory lines of insurance, such as auto liability.
"We believe there has been a lot of progress; there is some hard negotiating left," Mr. Snyder said.
"We very much want an agreement with Russia, and as soon as possible, but we still don't have all the components of a final agreement in place," he said.
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