VZCZCXRO0184
RR RUEHAG RUEHDBU RUEHDF RUEHIK RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSK
RUEHSR RUEHVK RUEHYG
DE RUEHMO #0873/01 0960732
ZNR UUUUU ZZH
R 060732Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 2751
INFO RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHAAA/WHITE HOUSE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 03 MOSCOW 000873 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS 
STATE PLS PASS USTR (HAFNER, BURKHEAD) 
COMMERCE FOR MAC (JACK BROUGHER, MATT EDWARDS, JAY THOMPSON) 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR EAGR ECON WTO RS
SUBJECT: AUSTR WILSON VISIT OPENS DIALOGUE ON IPR AND TRADE 
ISSUES 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET OR DISTRIBUTION 
OUTSIDE USG CHANNELS. 
 
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SUMMARY 
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¶1. (SBU) Assistant U.S. Trade Representative (AUSTR) for 
Europe and the Middle East, Christopher Wilson, co-chaired 
the first meeting in more than a year of the U.S.-Russia IPR 
Working Group during a visit to Moscow March 21-28.  In a 
welcome sign of renewed interest in the IPR Working Group, 
the GOR tapped Deputy Economic Development Minister Stanislav 
Vosskresenskiy to co-chair the meetings, and agreed on a path 
forward for future regular meetings.  In bilateral meetings 
with senior officials, AUSTR Wilson noted the need for clear 
guidance from the most senior GOR officials to get all of 
Russia's ministries and agencies fully behind the WTO 
accession process, to push through needed legislative and 
regulatory reforms on key WTO issues, and to resolve some of 
the remaining implementation issues with the November 2006 
U.S.-Russia bilateral WTO market access agreement.  Officials 
from the MFA, Duma, and the Ministries of Economic 
Development, and Industry and Trade, as well as a prominent 
Russian oligarch and WTO champion, reiterated the Russian 
view that accession is largely a political decision, rather 
than a matter of completing work in technical areas.  END 
SUMMARY. 
 
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Reenergizing the U.S.-Russia IPR Working Group 
--------------------------------------------- - 
 
¶2. (SBU) During his March 21-28 visit to Moscow, AUSTR Wilson 
co-chaired the first meeting of the U.S.-Russia IPR Working 
Group in more than a year, along with Russian co-chair Deputy 
Economic Development Minister Voskresensky.  (N.B. The 
November 2006 bilateral IPR agreement provided for quarterly 
meetings of the working group, but meetings have been more 
infrequent, with no formal meeting in the past 18 months.) 
The two-day meeting of the working group featured a balanced 
exchange of views on key IPR issues, including joint training 
and cooperation between U.S. and Russian agencies, Russia's 
progress on IPR legislative reform and recent changes in U.S. 
IPR legislation.  The two sides also discussed IPR 
enforcement activities, combating internet piracy, Russian 
accreditation of royalty collecting societies, and the U.S. 
approach to copyright and royalty collection. 
 
¶3. (SBU) In a welcome sign of renewed Russian interest in the 
working group, Deputy Minister Voskresensky and officials 
from virtually all of the Russian agencies with 
responsibility for IPR issues actively engaged with AUSTR 
Wilson and the U.S. interagency team.  In particular, Russian 
officials asked pointed questions of the U.S. team regarding 
IPR protection on the internet and U.S. copyright and royalty 
collection.  The Russian side also made valuable 
contributions on nearly all of the agenda items with the 
exception of internet piracy, on which they did not provide 
much information about Russia's counter-efforts. 
 
¶4. (SBU) Both sides agreed on the need to reenergize the 
working group and to hold senior-level meetings at six-month 
intervals in each capital, along with intermittent technical 
and working-level meetings on specific issues between each of 
the senior level meetings.  The U.S. side proposed holding 
the next senior level meeting in Washington in October, and a 
technical meeting in the summer that would focus on internet 
piracy, protection of pharmaceutical test data, and/or IPR 
legislative issues in general. 
 
¶5. (SBU) Although officials from the Health and Social 
Development Ministry did not participate in the working 
group, in a separate meeting with AUSTR Wilson, Director 
Diana Mikhailova and Deputy Director Marat Sakayev of the 
Pharmaceuticals and Medical Technology Department of the 
ministry, provided an update on the status of legislative 
amendments to protect pharmaceutical test data.  The GOR 
officials noted that the draft law had gone through the 
interagency clearance process and legal review by the 
 
MOSCOW 00000873  002 OF 003 
 
 
Ministry of Justice, and was now under review by PM Putin's 
office before being sent to the GOR Legislative Activity 
Commission for submission to the Duma.  They also confirmed 
that the current draft was the same version that the U.S. and 
EU officials had reviewed in the fall of 2008. 
 
--------------------------------------------- --- 
Bilateral Trade Issues and WTO Accession Process 
--------------------------------------------- --- 
 
¶6. (SBU) In bilateral meetings, AUSTR Wilson noted the need 
for clear guidance from the most senior GOR officials to get 
all of Russia's ministries and agencies fully behind the WTO 
accession process, to push through needed legislative and 
regulatory reforms on IPR, pharmaceutical data protection, 
SPS and other WTO issues, and to resolve some of the 
remaining implementation issues with the November 2006 
U.S.-Russia bilateral WTO market access agreement.  Officials 
from the MFA, Duma, and the Ministries of Economic 
Development (MED), and Industry and Trade, reiterated the 
Russian view that with few issues left to resolve, accession 
is largely a political decision, rather than a matter of 
completing work in technical areas. 
 
¶7. (SBU) MFA North America Department Director Igor Neverov 
noted that the G20 Summit in London and the President 
Obama-President Medvedev meeting would likely produce an 
action plan or checklist for future bilateral work, including 
the development of a deeper economic and trade dialogue.  MFA 
and MED officials also suggested that continued discussions 
on a bilateral investment treaty and on Russia's OECD 
accession process could form part of the renewed economic 
engagement.  MED officials expressed irritation that the U.S. 
Congress had not repealed the application of the 
Jackson-Vanik Amendment to Russia.  In addition, Duma 
Economic Policy and Entrepreneurship Committee Chairman 
Yevgeniy Federov noted that Russia would be unlikely to 
resolve its bilateral trade differences with Georgia and 
suggested that the involvement of a third country WTO member, 
such as the United States, might help to break the accession 
impasse with Georgia. 
 
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MIT's Role in Trade and Duty Increases 
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¶8. (SBU) Deputy Industry and Trade Minister Andrey Dementyev 
explained that after the May 2008 GOR reorganization, his 
ministry had assumed responsibility for the "practical 
elements" of Russia's external trade, including the import 
and export of industrial products, promoting Russian exports, 
and implementing trade remedies, such as dumping, subsidies 
and safeguards investigations of imports.  He noted that MED 
still had jurisdiction over questions of trade policy and 
remained the lead ministry on WTO accession.  That said, he 
broadly asserted that Russia was already complying with WTO 
rules and, while the GOR remained committed to accession, "it 
must be a two-way street," implying that WTO members would 
need to be willing to compromise with Russia. 
 
¶9. (SBU) Dementyev noted that the global economic downturn 
had created a "strong impulse" in many countries to protect 
domestic producers and maintain employment levels, but said 
that Russia had decreased more duties than it had raised in 
response to the crisis.  (N.B. In a separate meeting, Deputy 
Economic Development Minister Voskresensky echoed this theme, 
noting that protectionism was rising around the world.) 
Dementyev called Russia's duty increases on new imported 
vehicles "insignificant."  However, the sharp increases in 
used car duties were intended to stimulate domestic demand 
for new cars and would benefit the U.S. car companies with 
Russian production plants (i.e., Ford and GM), he noted. 
Dementyev stated that the Ministry of Industry and Trade was 
working to resolve the question of what duty rate to apply to 
the off-road heavy duty mining and construction trucks 
produced by Caterpillar and Terex for which there was no 
equivalent production within Russia.  On the question of the 
recent duty increase on combine harvesters, Dementyev argued 
that the Russian safeguards investigation had been conducted 
in accordance with international norms, and the GOR would 
 
MOSCOW 00000873  003 OF 003 
 
 
decide in nine months whether to keep the duty increase in 
place, reduce it, or impose a special safeguards tariff 
measure, based on market conditions at that time. 
 
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Leading Oligarch Shares His Views on WTO 
---------------------------------------- 
 
¶10. (SBU) Severstal CEO Aleksey Mordashov, who also heads the 
Russian Union of Industrialists and Entrepreneurs' Trade 
Policy Committee, noted that the remaining substantive and 
technical issues in Russia's accession were minor compared to 
the benefits that Russia and its trading partners would reap 
from accession.  In his view, accession would be a great 
symbol of Russia's openness to foreign trade and would help 
to improve the investment climate, though he also admitted 
that accession would not be a "panacea."  He said that 
Russia's WTO negotiator Maksim Medvedkov had told him that 
with a major political push from senior Russian and U.S. 
leaders, the accession could be completed in as little as one 
month.  He noted, however, that the "real work" of opening up 
the Russian economy would start after accession when Russia 
would have to reform its economy to meet WTO standards. 
 
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St. Petersburg International Economic Forum 
------------------------------------------- 
 
¶11. (SBU) Russian officials from the Ministry of Economic 
Development also urged U.S. Trade Representative Kirk to 
consider attending the June 4-6 St. Petersburg International 
Economic Forum, noting that Economic Development Minister 
Nabiullina would be sending out invitations to the event 
soon.  (N.B. On March 31, the Embassy received invitations to 
the forum from Minister Nabiullina for the Ambassador, 
Commerce Secretary Locke, Treasury Secretary Geithner and 
U.S. Trade Representative Kirk.  We have forwarded the U.S. 
Cabinet invitations to EUR/RUS and the relevant Washington 
agencies.). 
 
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COMMENT 
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¶12. (SBU) A reenergized IPR Working Group could serve as one 
aspect of a renewed economic and trade dialogue with Russia. 
In addition, continued regular visits of USG economic and 
trade officials from the new Administration will help build 
momentum for closer economic and commercial relations, 
including especially a renewed push for Russia's WTO 
accession, which would be the best spur possible toward a 
more open and modern Russian economy. 
BEYRLE