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Failure to solve Kaliningrad Conundrum

The Russia-EU summit in Moscow ended on 29 May with a joint declaration in which the two sides acknowledged that they had failed to find a compromise regarding the Kaliningrad problem and agreed only to further talks, Russian and Western news agencies reported. During the talks, Russian President Vladimir Putin referred to the Kaliningrad question as a defining issue in EU-Russian relations, while European Commission President Romano Prodi stated that the problem can be resolved only "without causing damage to the security of either party." Russia has proposed establishing visa-free transit corridors for Russian citizens between the exclave and the rest of Russia through Lithuania and Poland, and the EU insists upon instituting a visa regime, albeit a simplified one.

...as EU vows to upgrade status of Russian Economy

The joint declaration also includes an EU commitment to recognize Russia as a full-fledged market economy within the next three months and to modify EU trade rules to reflect this new status, Western and Russian news agencies reported on 29 May. The decision is a significant step toward Russian accession to the World Trade Organization, since the WTO only accepts countries with this status. Deputy Prime Minister Viktor Khristenko told RIA-Novosti that the granting of such status does not mean the automatic cancellation of antidumping measures, but it should simplify the process of investigating antidumping disputes. Putin stressed the practical importance of the measure. "There are 14 antidumping measures against Russian products in Europe and 100 worldwide. They have caused a $1.5 billion loss to the Russian economy," Putin said, according to Interfax. Some observers had expected the United States to grant Russia market-economy status prior to U.S. President George W. Bush's trip to Russia last week, but the U.S. Commerce Department announced that it will not make the decision until next month.

(RFE/RL 31.v.02)

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