Several nations have been involved in separate global trade talks and deals during this week. In fact, Russia and Moldova recently inked a bilateral agreement, which supported the former's bid to become a member of the World Trade Organization (WTO). According to reports, Moldovan Minister of Economy and Trade Igor Dodon and his Russian counterpart signed the pact in Moscow. Maxim Medvedkov, Russia's principal WTO negotiator, stated that his country appreciated the pragmatism of Moldova regarding the matter. With the recent WTO deal with Moldova, Russia is now close to its goal of joining the world's biggest economic bloc. A month ago, Russia also won the support of the US when the two countries signed a bilateral agreement. But the nation still needs to close similar deals with Costa Rica, Georgia, El Salvador, and Guatemala. It must be noted that Russia has spent more than ten years in negotiating for its accession to the WTO. A seat at the international trade bloc would not only benefit Russia's huge economy, but it would also geographically and economically expand the World Trade Organization.

Meanwhile, Russia's state-run company Gazprom would be paying about $7.5 billion in a move to secure a 50%-plus-one-share in the Sakhalin-2 project. The Russian energy giant was able to secure the international trade deal after Royal Dutch Shell had been accused of violating environmental policies. The new energy pact was signed by Russian President Vladimir Putin and top officials from Shell and Gazprom. As a result of the recent agreement, Shell would be left with only 27.5% of shares. Japanese firms Mitsubishi and Mitsui would also see their share decreased. However, it is not yet clear until now whether Shell would still lead the Sakhalin-2 project. In an official statement, the company said that it would still contribute largely in the management of the consortium and it would remain as the project's technical adviser. The Sakhalin-2 project is due to be completed in 2008. Once the project is finished, it would be the world's biggest integrated oil and gas field.

Recently, Georgia signed an international trade agreement on gas with Turkey in a move to secure adequate energy supplies. Georgian Energy Minister Nika Gilauri said that his nation was considering to purchase around 800 million cubic meters of gas from Turkey starting next year. The specified volume of gas imports accounts for nearly 50% of Georgia's gas needs. Needless to say, the price for the energy imports was not disclosed. The gas agreement was also signed by Georgia in an attempt to lessen its dependence on Russian gas. It must be noted that recently, Georgia was forced to double its payment for Russian gas after Gazprom had threatened to disrupt its supplies if the nation refused to comply. Previously, Georgia only paid $110 per 1,000 cubic meters of gas. Now, the country has to pay $235 to the Russian energy giant. Meanwhile, Azerbaijan's President Ilham Aliyev complained after Gazprom had demanded for a higher price for its gas exports. In a retaliatory response, Mr. Aliyev threatened to cut the volume of gas, which his country buys from Russia, or even stop purchasing gas. It must be noted that Russia has been criticized and accused of using its rich energy resources in bullying countries that depended on its energy supplies. Almost a year ago, Russia roused concerns across Europe after Gazprom had cut its gas supplies to Ukraine due to a price dispute.

In the Middle East region, Iran has shown its interest to boost its international trade relations with some Latin American countries. According to reports, a conference concerning trade and business opportunities for Iran and some Latin American nations would be held early next year. Abdolhamid Asadian, who is the current chief of the Europe-America Trade Development Organization of Iran, said that the meeting has been aimed at encouraging investments and increasing trade opportunities for Iran and some Latin American nations like Mexico, Venezuela, and Brazil.

Meanwhile, Trade Minister Phil Goff, Customs Minister Nania Mahuta, and Commerce Minister Lianne Dalziel recently announced that industries in New Zealand could benefit from the more liberalized trade  between their country and Australia starting next year. Particularly, the three officials said that businesses could benefit from the lowered compliance costs. It must be noted that the new Rules of Origin reform, which was included in the CER (Closer Economic Relations Trade Agreement) between New Zealand and Australia, has contributed in the improvement of policies covering New Zealand manufacturers and exporters seeking for a preferential accession to the markets of Australia. Analysts commented that the reform of the Rules of Origin would further liberalize international trade between Australia and New Zealand. It would also reduce the cost of compliance and boost the competitiveness of businesses in the two countries. The reform, which is the result of a series of trade negotiations, is expected to benefit businesses in both sides.

US Keen to Improve Economic Alliance with South Korea, Turkey and Some Latin American Countries

At present, the United States is focused on boosting its international trade relations with South Korea, Turkey, and some nations in Latin America. In fact, both the US and South Korea are currently in the process of negotiating a proposed free trade agreement (FTA). The two countries have had several rounds of trade discussions since the FTA talks were launched a few months ago. Needless to say, the US and South Korea still need to settle some issues in order to reach an accord. Particularly, the two parties are negotiating on South Korea's proposal to change the US anti-dumping policies, which are included in the FTA. But US trade authorities said that the proposal of South Korea would not be included in the final form of the free trade agreement. The position of the US was also stated in an official a report, which was submitted by the Office of the US trade representative to the Congress. The current anti-dumping policies of the US have been among the major impediments to the progress of the FTA talks. If the trade deal between the US and South Korea materialized, it would be the largest trade agreement signed by the US after the NAFTA (North American Free Trade Agreement).

While trade negotiations with South Korea are on-going, the US has also shown its interest to boost its international trade alliance with Turkey. Recently, Turkish State Minister Kursad Tuzmen stated that both parties would increase the volume of their trade up to $15 billion in the next three years. US-Turkey trade is projected to significantly grow in the succeeding years with increased cooperation between the two nations.

Aside from South Korea and Turkey, the US wants to deepen its economic ties with some Latin American nations. Recently, the US Ambassador to Venezuela stated that bilateral ties between the two nations could further improve and grow despite their current political conflict. William Brownfield said that the US could use its improved international trade relations with both Vietnam and China in boosting its alliance with Venezuela. Particularly, Mr. Brownfield stated that both the US and Venezuela could improve their ties in terms of energy trade. He also said that the two nations could boost their cooperation in terms of anti-drug campaign. Based on reports, the US-Venezuela trade has continued to improve during the past few years despite the deteriorating political relations between the two nations. In fact, trade between the the US and Venezuela is expected to reach up to $50 billion by the end of this year. Meanwhile, analysts commented that the relations between the US and Venezuela showed some signs of improvement after President Hugo Chavez had been re-elected as the leader of Venezuela.

Bush Shows Strong Support to Doha Talks

US President George W. Bush renewed his support to the Doha Development Round of Trade Talks last Wednesday amidst the efforts of the World Trade Organization to salvage the stalled trade negotiations. During a press conference, Mr. Bush said that free trade was advantageous not only for the US, but also for the developing nations, which were struggling to improve their respective economies. He added that free trade was also one of the major elements needed in boosting global trade and the world economy. Mr. Bush made these comments amidst concerns that the Democrats, who would be taking control of the US Congress early next year, would not support the trade negotiations. The Doha Development Round of Trade Talks was launched at the Qatari capital in 2001. The negotiations have been primarily aimed at reducing tariffs and removing other barriers to the trade relations among the WTO nations.

Meanwhile, signs of the resumption of the global trade talks have sparked hopes in India that the negotiations regarding the services sector would also restart with the negotiations concerning agricultural and industrial products. But things are moving slower than expected in WTO. Although several trade ministers have agreed to meet in order to resolve all issues affecting the Doha talks, they have not yet determined a specific date for the submission of improved offers regarding the liberalization of services. India's strong support to the liberalization of services does not come as a surprise considering the country's growing services exports.

WTO Membership Poses New Challenges to Vietnam

Vietnamese Minister of Industry Hoang Trung Hai recently said that his country's entry to the WTO not only presented bigger opportunities, but it also posed new challenges to its industries. As a member of the global trade body, Vietnam is now required to lower its import tariffs and eliminate other barriers, which will affect its trade relations with foreign partners. Mr. Hai said that such responsibility was a huge challenge, especially in terms of the competitiveness of Vietnam's local industries. According to him, the competitiveness of Vietnamese industries in world trade was weak compared to the businesses of its neighboring countries. Particularly, Vietnamese industries are weak in the aspects of production effectiveness, labor productivity, science and technology, business success, and management capacity. Needles to say, Mr. Hai cited four solutions to the problem. First, both the sectors and ministries should cooperate in revising and reforming Vietnam's legislative system. Second, products that could boost Vietnam's position in the world market must be developed. Third, state-run businesses must be reorganized to encourage more foreign investments. Fourth, businesses must employ specific measures, which could boost their competitiveness both in the local and international markets.

WTO Urges EAC Members to Commit to Single Customs Union System