RUSSIA: AMBASSADOR'S MAY 8 MEETING WITH MINISTER

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002159

SIPDIS

SIPDIS

STATE PLEASE PASS AGRICULTURE ELECTRONICALLY
STATE FOR EUR/RUS - MWARLICK, AHOLMAN, SGUHA AND EB/TPP/BTA
STATE PASS USTR FOR SDONNELLY, LERRION, LMOLNAR
NSC FOR MKLECHESKY, TMCKIBBEN

USDOC FOR 4231/IEP/EUR/JBROUGHER
USDOC FOR 4231/IEP/EUR/MEDWARDS
USDA FOR U/S PENN, OA/ JAFLEMINGS, FAS FOR
ONA/RIEMENSCHNEIDER

E.O. 12958: DECL: 03/30/2016
TAGS: ETRD EAGR ECON WTO KIPR RS
SUBJECT: RUSSIA: AMBASSADOR'S MAY 8 MEETING WITH MINISTER
OF ECONOMIC DEVELOPMENT AND TRADE GERMAN GREF

REF: A. MOSCOW 1928

B. ST. PETERSBURG 94

Classified By: Ambassador William Burns for Reasons 1.5 (b) and (d).


1. (C) Summary: In a May 8 meeting with Ambassador, Minister
of Economic Development and Trade German Gref confirmed plans
to travel to the U.S. later this year, expressed hope that
high-level representatives from USTR, Commerce and/or
Treasury would attend the June 2007 St. Petersburg Economic
Forum, undertook to press Agriculture Minister Gordeyev on
outstanding bilateral issues related to U.S. beef plant
inspections and agriculture, hoped to resolve key trade
irritants with the European Union by late May, expressed
thanks for USTR Schwab's recent phone call, and raised
Russian aspirations to start OECD accession talks.
Ambassador pressed on IPR, urging that the Russian delegation
to this month's bilateral IPR Working Group explain efforts
to meet IPR Side Letter commitments, conveyed
PriceWaterhouseCoopers' appreciation for extension of its
license to operate in Russia, asked for Gref's support in
advocating a proposed meeting of U.S. and Russian CEOs with
Putin on the margins of the St. Petersburg Economic Forum,
and highlighted International Paper's board meeting in Moscow
and pending joint venture with Ilim Pulp. End summary.

Gref Visit to U.S.


2. (C) In a May 8 meeting, Ambassador conveyed to Minister of
Economic Development and Trade (MEDT) German Gref that
Commerce Secretary Gutierrez would welcome a Gref visit to
the U.S. later this year. Gref responded that he will work
with Commerce and the Embassy when his schedule eases up in
June to determine dates convenient for all.

St. Petersburg Economic Forum


3. (C) Ambassador conveyed that we are still waiting for word
on possible participation by high-level officials from
Commerce and Treasury in the June 8-10 St. Petersburg
Economic Forum. Gref expressed interest in attendance by
USTR Schwab. Ambassador relayed that a number of U.S. CEOs
planned to come, and conveyed interest on the part of a small
group of U.S. and Russian CEOs in meeting with President
Putin on the margins of the Forum to discuss issues related
to Russia's efforts to accede to the World Trade Organization
(WTO). Gref said he would try to raise this request with
Putin. Gref reported that preparations for this year's Forum
are going well, and are much more sophisticated than last
year's harried organization. He confirmed that his ministry
is cooperating with World Economic Forum (WEF) officials to
set up several roundtables, and that the WEF was providing
some overall technical assistance.

WTO/IPR


4. (C) Ambassador thanked Gref for his participation in the
April 17 IPR roundtable at Spaso House on protecting Russia's
music industry (ref A). He noted recent enforcement measures
taken against pirates in St. Petersburg (ref b),and urged
that the Russian delegation to the May 18-21 IPR Working
Group meeting in Washington explain in detail concrete steps
taken to fulfill IPR side letter commitments, including
increased enforcement actions.


5. (C) Ambassador also highlighted the need to arrange
quickly a conversation between USTR's Chief Agriculture
Negotiator Ambassador Crowder and Russian Agriculture
Ministry Head of Department Dr. Rozhdestvenskiy so the two
can agree on a checklist and schedule for Russian
veterinarians to inspect U.S. beef processing facilities.
Gref replied that while Agriculture Minister Gordeyev was
currently on vacation, the two plan to meet next week and
Gref will "give a nudge" to Gordeyev on the need to resolve
this issue. Ambassador said that would be very helpful,
again stressing the importance to get moving on Russia's
agricultural commitments.


6. (C) Gref expressed appreciation for USTR Schwab's recent
call, which clarified the U.S. Administration's positions

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vis-a-vis Russian efforts to accede to the WTO and efforts to
lift the Jackson-Vanik amendment. He said that he had
disseminated to "all quarters" of the GOR his assessment that
the Russian media reporting of USTR Schwab's public remarks
on those subjects was "slapdash" and poorly conveyed.


7. (C) In response to a question about the May 17-18
Russia-EU Summit, Gref acknowledged that, while there will be
no WTO-related negotiations in the absence of Commissioner
Mandelson, there are two outstanding trade-related questions
to be resolved (Note: while he was not specific, we assume
Gref was referring to disputes over the Russian ban on
imports of meat from Poland and export duties, including on
timber.) Gref said that while final solutions had not yet
been reached, Russia and the EU were involved in "proactive
negotiations," and he hoped the two key issues would be
resolved by the end of May. He contrasted the tenor of
Russia's discussions with the EU and those with the U.S., but
acknowledged the need for further bilateral work with the
U.S. to "hammer out remaining issues." He specifically
mentioned beef and other agricultural issues, and repeated
his intention to encourage Minister Gordeyev to be
"predisposed to a positive approach."

U.S. Company Advocacy


8. (C) Ambassador raised to Gref's attention International
Paper's (IP) board meeting in Moscow this week, commenting
that the presence of the company's board members sent a
positive signal about the impending IP joint venture with
Russian company Ilim Pulp.


9. (C) Ambassador expressed appreciation on behalf of
PriceWaterhouseCoopers (PWC) for extension of its license to
operate in Russia and noted that PWC continues to cooperate
with the Ministry of Finance on outstanding questions related
to investigations of PWC's accounting methods and tax
practices. Gref confirmed conversations with Finance
Minister Kudrin and the Chair of the Federal Arbitration
Court on the PWC issue, and thought they both understood the
ramifications of proceedings against PWC.

OECD


10. (C) Prompted by MEDT's lead WTO negotiator Maksim
Medvedkov, Gref raised the pending decision by OECD Ministers
at their May 15-16 meeting in Paris whether to open accession
negotiations with Russia. Ambassador reiterated the U.S.
position as expressed by the U.S. representative at the April
19-20 OECD Executive Committee meeting. Gref said he
understood that the UK and Canada were still undecided. He
observed that current deliberations were only about kicking
off the negotiating process, and anticipated future "clear
cut and normal" negotiations with OECD on Russian accession.


11. Comment: Gref was clearly appreciative of USTR Schwab's
efforts to reiterate the U.S. position vis-a-vis Russia's WTO
accession and Jackson-Vanik, and anxious to have Ambassador
Schwab and other high-level USG officials attend the St.
Petersburg Economic Forum. Noteworthy was Gref's
characterization of U.S.-Russia WTO talks as going relatively
smoothly, in contrast to contentious discussions with the EU.
BURNS